And in fact, during this post is the time when the peak of the Income Tax Authority is waiting for our personal assessment to be sent to them before the big tax is coming. With that, every single year, the time for accountants will be busy is this month, October and December. But having said that, let's pop some questions for you, is Income Tax important for you?WHY? This will be the main agenda of our topic today.
Before we go on further, let's have some understanding what exactly tax are. Tax is a sum of money paid by the citizens to the government on the income or value of good purchases of certain specific goods and services. For individuals, we have income tax that is based on the amount that we earn and we have to give this contribution to the government. And as the relationship is directly from us to the government, the taxes that we paid from our income is called DIRECT TAXES. As for indirect taxes, is whereby our money is paid to the products or services that is charged with tax, which later will be paid by another agent to the authority. As for example, we go and eat in McD, and we have to paid for Government Tax of 5% , and that is indirect taxes.
So imagine, how many things we are paying for taxes nowadays. Even some Mamak (food stalls) and Chinese Hawker stalls nowadays require us to pay tax. And with the plan of having GST (goods and service tax) on everything we buy soon, wow, where is the money for us to even buy toilet papers? Just joking, but yes, as a country become more developed and with technology growing exponentially, more expenditure is to made from the Government bodies. And with 60-70% of Malaysia's income comes from tax, our country is depending on us, the smart and hardworking brats to fund for the country. WAIT A MINUTE!
Does it mean that tax is the main contributor to the Federal Government? Answer is YES! From the latest 3 years record (2007-2009) that I got from Bernama (click on this hood), 70.6% of our Federal Government Revenue amounting to RM 124, 379 millions are from taxes, this is the budget for this year (2009) actually. Alright, the actual amount collected on 2007 and 2008 were RM 95,168 millions and RM 107,737 millions respectively. And this collected amount stands in 68% (2007) and 66.5% (2oo8) in our country.
With that amount approximate 44% to 47% are coming from the income taxes. Be amazed with the figures below (click to enlarge)
And with that money, we citizens enjoy the infrastructure and facilities and improvement especially in standard of living. And back to our topic today, is Income Tax important for you? Definitely yes because if you do not pay it or submit your assessment you will be summoned, a huge amount of money. But is that the main important things? Simply NO, because the money that is taxed, you will try to minimize it as you want to have more money for yourself.
With that idea of 'more money for yourself', brings in the hot topic for country with taxes. Each and every year, Politics will fight each other and with 70% of our income is by tax, TAX is the topic that is always discussed. Click this link to read the latest story in America that was shared to me by Priya, our friend. The debate goes on, because with that huge amount of money, development is usually lack been seen in our country. I'm not saying that there are no developments, but the debate is always regarding that where the money goes, as with the budget, is money wisely managed.
As always, money is a sensitive issue and money makes the whole world goes round, you can see this effect that citizens will want their contribution to tax wisely used. And with that, some try to evade taxes partly not because they can't pay, but they don't wish their money to be used inefficiently. And this is the reason why I said this topic is hot. Still in introductory actually! hehe.
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