Income Tax - this is one of the ways how the government earns money, and this money is used for the general good of the people of Malaysia.
The poor, and those in the lower income groups pay no tax...or very little income tax, and the more you earn, the more you pay...and this is justice. But in Malaysia, over the past few years there has been a reduction in the amount tax paid by the very rich. Something is very wrong.
Let us concentrate on those earning RM100,000 and more...and we see that the UMNO-led BN government of Malaysia have been reducing the personal income tax payable for the rich...and very rich.
We also note that there is no significant jump in tax payable for rich, very rich...and very very rich... in fact in 2010 those earning above RM100,000 , and those earning RM500,000...or millions are all paying only 26%. Why? Comparatively, those earning above RM10,000 pay 3%, above RM20,000 pay 7%, and above RM35,000 pay 12%, above RM50,000 pay 19%, and above RM70,000 pay 24%....then it suddenly stays put at 26% for those earning above RM100,000 - this is certainly unjust...and it shows that our government seems to be favouring the very rich...the higher the income, the greater the tax that one should be paying...
In Australia, those earning above AUD35,000[about RM96,000] are paying 30%, those earning above AUD80,000 [about RM220,000] are paying 38%, and those earning above AUD180,000[about RM495,000] are paying 45%. lSource
In US, with regard to Federal tax, above USD34,000[about RM114,000] pay 25%, above USD82,400 [about RM277,000] pay 28%, above USD171,850 [about RM577,000] pay 33%, and above USD373,650 [about RM1.26 million] pay 35%. source: Money Blue Book
Personal income tax rates applicable to taxable income are as follows.
 Tax rates of the Personal Income Tax | ||||||||||||||||||
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In short, the higher you earn...the more personal income tax you pay, and we wonder why the UMNO-led BN government is making the rich and super rich of Malaysia pay so little income tax...whilst they claim financial problems, and seek to inflict the poor by introduction of the GST, etc...
Previously, Malaysia wooed the foreign investor to Malaysia to open factories...do business...and gave them all long tax-holidays as an incentive. The government spent the rakyat's money to build up the area, the infrastructure, the roads, etc... and these foreign companies are excluded from paying taxes on the profits that they make from their Malaysian operation. [Note previously, these companies provided large number of jobs for locals....hundreds...and thousands of jobs, but today, with increased automation and the other obligations of existing free trade agreements...the amount of jobs provided for locals are very minimal - and that too usually unskilled jobs - where there will be almost no technological/skills transfer. Further, today most of these companies are relying on migrant workers...and not so many locals]. I believe Malaysia is doing this, and these companies are still not paying taxes (or just minimal taxes...)]
We really need to re-look Malaysia's personal income tax rates - and increase the taxes payable by the very rich...the biggest income earners. The Malaysian personal income rates from those earning more RM100,000 (whose taxable income is more than RM100,000) and above for the last 3 years is laid out below. Below that is our income tax rates for the last 3 years...[Source: Official Website of Malaysia's Inland Revenue Board]
RM100,000 (RM100,001 - RM149,999)
In 2008 - 14,475 (27%)
In 2009 - 14,325 (27%)
In 2010 - 14,325 (26%)
RM150,000 (RM150,001 - RM249,999)
In 2008 - 27,975 (27%)
In 2009 - 27,825 (27%)
In 2010 - 27,325 (26%)
RM250,000 (RM250,001 - .......)
In 2008 - 54,975 (28%)
In 2009 - 54,825 (27%)
In 2010 - 53,325 (26%)
2010
Chargeable Income | Calculations (RM) | Rate % | Tax(RM) |
0-2500 | On the First 2,500 | 0 | 0 |
2,501-5,000 | Next 2,500 | 1 | 25 |
5,001-10,000 | On the First 5,000 Next 5,000 | 3 | 25 150 |
10,001-20,000 | On the First 10,000 Next 10,000 | 3 | 175 300 |
20,001-35,000 | On the First 20,000 Next 15,000 | 7 | 475 1,050 |
35,001-50,000 | On the First 35,000 Next 15,000 | 12 | 1,525 1,800 |
50,001-70,000 | On the First 50,000 Next 20,000 | 19 | 3,325 3,800 |
70,001-100,000 | On the First 70,000 Next 30,000 | 24 | 7,125 7,200 |
100,001-150,000 | On the First 100,000 Next 50,000 | 26 | 14,325 13,000 |
150,001-250,000 | On the First 150,000 Next 100,000 | 26 | 27,325 26,000 |
Lebih 250,000 | On the First 250,000 Next RM | 26 | 53,325 .......... |
2009
Chargeable Income | Calculations (RM) | Rate % | Tax(RM) |
0-2500 | On the First 2,500 | 0 | 0 |
2,501-5,000 | Next 2,500 | 1 | 25 |
5,001-10,000 | On the First 5,000 Next 5,000 | 3 | 25 150 |
10,001-20,000 | On the First 10,000 Next 10,000 | 3 | 175 300 |
20,001-35,000 | On the First 20,000 Next 15,000 | 7 | 475 1,050 |
35,001-50,000 | On the First 35,000 Next 15,000 | 12 | 1,525 1,800 |
50,001-70,000 | On the First 50,000 Next 20,000 | 19 | 3,325 3,800 |
70,001-100,000 | On the First 70,000 Next 30,000 | 24 | 7,125 7,200 |
100,001-150,000 | On the First 100,000 Next 50,000 | 27 | 14,325 13,500 |
150,001-250,000 | On the First 150,000 Next 100,000 | 27 | 27,825 27,000 |
Exceeding 250,000 | On the First 250,000 Next RM | 27 | 54,825 .......... |
2008
Chargeable Income | Calculations (RM) | Rate % | Tax(RM) |
0-2500 | On the First 2,500 | 0 | 0 |
2,501-5,000 | Next 2,500 | 1 | 25 |
5,001-10,000 | On the First 5,000 Next 5,000 | 3 | 25 150 |
10,001-20,000 | On the First 10,000 Next 10,000 | 3 | 175 300 |
20,001-35,000 | On the First 20,000 Next 15,000 | 7 | 475 1,050 |
35,001-50,000 | On the first 35,000 Next 15,000 | 13 | 1,525 1,950 |
50,001-70,000 | On the First 50,000 Next 20,000 | 19 | 3,475 3,800 |
70,001-100,000 | On the First 70,000 Next 30,000 | 24 | 7,275 7,200 |
100,001-150,000 | On the First 100,000 Next 50,000 | 27 | 14,475 13,500 |
150,001-250,000 | On the First 150,000 Next 100,000 | 27 | 27,975 27,000 |
Lebih 250,000 | On the First 250,000 Next RM | 28 | 54,975 .......... |
I don't really see your point. By taxing more the rich, what would the poor get? The riches will hire the accountants and they have 101 ways to pay less tax. In fact by taxing more the riches, the riches will pass the çost' to the poor and eventually all especially the poor will suffer as the riches want to maintain their share of profit. The correct measure is to make sure the gov implement minimum wages.
ReplyDeleteAgree with nkeat. The fact remain that many who are actually taxable are evading tax.
ReplyDeleteThe real victims of taxation is salaried workers, while many others, especially businessman and also those who clamour for justice, level playing field, meritocracy, avoids paying tax
Please do read my take on this
http://balankumarpremakumaran.blogspot.com/2009/12/gst-focus-on-tax-evaders-first.html
It is no big secret that a sizable number of M'sians DON'T pay income tax(Malays) or under declare their taxes.
ReplyDeleteFor the former, paying "zakat" in lieu of income tax seems to be the favoured excuse while those in the latter category, are often engaged in cash business'.
At the heart of this problem Charles, is enforcement.
Go throw a stone at any 'newly' rich and check if a tax file exist ? No surprise there and of course, the many with stolen money, handouts, new Merc, new house and wife etc ie especially them UMNO associates - DON'T need to pay tax mah !
I commend you for shooting in the dark but one that needs urgent attention to rouse public interest.
Regards as always.
The government may impose a new tax called 'Luxury Vehicles Fuel Tax' if the government always manipulate issue on luxury vehicles paying the same fuel prices with the ordinary vehicles.
ReplyDeleteThe tax rate might be at 5% of the luxury vehicle's original selling price (not market price) which must be paid together with the road tax renewal EVERY YEAR! Failing which the vehicle's road tax will not be renewed.
I recommend vehicles with original selling price of above RM250k are subject to this new tax. If the original price is RM300k, the fuel tax will be RM15,000 per year which I believe is nothing for those who can afford to own such expensive vehicles.
If our country has half a million of such vehicles, the tax can recover billions of RM for the fuel subsidy. Insurance rates for such vehicles shall be increased as well.
The same method also can be used for bungalows, luxury condominiums, villas etc. in order to ensure the poor people is not affected by the removal of utilities' 'cheap' rates.
If such taxes being imposed, those self-employed rich individuals who are hiding from paying taxes, will have, at last, to pay something more for the country, as MOST OF THEM cannot avoid themselves from the influence of being rich i.e. buying luxury products, using high-end services & using more utilities (water, electricity) at home.
So, if they can avoid income tax, they can't avoid these taxes at all unless they are a kind of 'very down to earth' rich man that does not want to buy or use luxury things. And maybe this nice rich man has to pay something too - Cumulative Savings/Current Account Tax which can be traced through IC number. I recommend to impose a new 1% or even 3% ANNUAL tax on those with accumulative savings of more than RM2 million.