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Malaysia Tax System can
be divided as direct taxes and indirect taxes. The direct taxes such as
Corporate and Personal Income Tax, Custom Duty Tax while for indirect taxes
include Goods and Services Tax (GST). This entry will talk about Personal
Income tax and GST in Malaysia.
Personal Income Tax is
a tax collected from individuals and it is imposed on different sources of
income like labour, pensions, interest and dividends. In Budget 2016, the
personal income tax rate increase in high income earners and remain unchanged
in low and middle income. The comparison between 2015 and 2016 will be shown at
the table 1. (OH YI ZHI)
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| Table 1 |
We disagreed that personal income tax have impact
the middle class and lower income group in Malaysia. As a Malaysian citizen, we
have a responsibility to ensure that the country’s property is always properly
cared for. Thus, we are based on our ability such as personal income to pay the
income tax in order to contribute to the country. The primary function of taxes
is to generate a stream of revenue for the government. Therefore, the tax that
has been paid would be utilized in various types of purpose, such as paying the
salary to the government employee and ensure the road safety as well as
well-maintained (LIM MIUN CHEN).
GST is stands for The Goods and Services Tax and it is a consumption tax imposed on the sale of
goods and services. In some countries it is also called Value Added Tax (VAT).
It is a new tax instrument introduced by the Malaysian government on April 1 in
2015 and it is stand at 6 percent. GST has been force to charge
on a material. GST is the replacement of CJP and SST.CJP stands for Cukai
Jualan dan Perkhidmatan and SST stands for Sales & Service Tax. (SHAARMENI)
Goods and Services Tax
(GST) had affected the business and consumers in Malaysia, especially
the middle class and lower income group. The meaning of GST is the products prices increasing and cost of
living become high, therefore people may not willing to spend so much as their
limited purchasing power. For example there are some people is not
eligible to pay for income tax where their income is under certain amounts, so
the broad based tax system-GST will impact on those low income workers who are
not the taxpayers, now as they will have to pay for GST when they consume and
make purchases. (KHOR QIAO ROU)
Malaysia has to keep tab on improvements to the tax legislation in
the region and other parts of the world. Make proactive suggestions to reform
and enhance the current structure so that we are in step with worldwide
developments. There are some of the current tax
system that is unfair for the middle class and lower
income group but some is not, like we disagreed that personal income tax is unfair but we agree that GST is unfair for them in Malaysia.
References
KPMG (2015) ‘Malaysia – Budget 2016 taxes high
earners more, relief for low-to-middle incomes’ [Online] https://home.kpmg.com/xx/en/home/insights/2015/11/flash-alert-2015-134.html
[Accessed: 03/11/2016]
Kumar, D. (2014) ‘What
are the good sides and the bad sides of GST (goods and services tax)?’ Quara [Online] https://www.quora.com/What-are-the-good-sides-and-the-bad-sides-of-GST-goods-and-services-tax
[Accessed: 03/11/2016]
R & C RADZI & CO CHARTERED ACCOUNTANTS
(2016) ‘ DEFINASI CUKAI BARANG DAN PERKHIDMATAN’ http://www.rundinggst.com/index.php/features-mainmenu-47/definasi-gst
[Online] [Accessed: 05/11/2016]
Trading Economics (2016) ‘Malaysia Personal Income
Tax Rate’ [Online] http://www.tradingeconomics.com/malaysia/personal-income-tax-rate
[Accessed: 03/11/2016]
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