Basic Consumer Math

Consumer Mathematics - Taxation

by: Maisurah Amir

Poll

Have you heard of taxation?

• Yes

• NO

WHAT IS TAXES?

TAXES IS THE AMOUNT OF REVENUE OR MONEY COLLECTION FROM INDIVIDUAL OR COMPANIES TO THE GOVERNMENT UNDER PARLIAMENTARY APPROVED ACTS.

Open Ended

WHY DO WE PAY FOR TAXES?

PURPOSE OF TAXES

WHO'S IN CHARGE?

• IRB/LHDN

• Royal Custom Department

• State Government

• Road Transport Department/JPJ

Multiple Choice

HOW MANY TYPES OF TAXES?

• 2

• 3

• 4

• 5

Multiple Choice

WHICH OF THE FOLLOWING IS NOT THE RIGHT TAX?

• ROAD TAX

• INCOME TAX

• PROFIT TAX

• QUIT RENT

TYPES OF TAXES

• INCOME TAX - INDIVIDUAL OR COMPANY

• ROAD TAX

• PROPERTY ASSESSMENT TAX

• QUIT RENT

• SALES AND SERVICES TAX

INCOME TAX

• impose on income from individual or company operating in Malaysia

• each salaried individual and company has to register as tax payer and pay income tax annually

• has to report all income, tax rebate, tax relief, tax reduction. tax exemption

• SELF ASSESSMENT SYSTEM

• Who's collecting? IRB/LHDN

ROAD TAX

• implemented to road use who owns vehicle

• has to pay before the existing road tax expires.

• Must be shown on the vehicle

• If it expired for more than a year, the vehicle has to be sent to the PUSPAKOM

• If it is not paid, vehicle are not allowed on the road.

• Paid to Road Transport Department(JPJ)

PROPERTY ASSESSMENT TAX

• Levied on all holdings or building

• Local authority

QUIT RENT

• Imposed to the owner of land.

• Collected by State land Office.

SALES AND SERVICE TAX.

• Sales tax - levied only once on taxable goods at the stage of manufacturing or importation

• Service tax - imposed on consumer who receives taxable service

• Manufactures or importers with sales more than RM 500 000/year has to register under Sales Tax Act 2018

• Service provider with taxable services more than RM 500 000 per annum and F&B services with value of taxable services more than RM 1.5M per annum shall register under Service Tac Act 2018

• RMCD (JKDM)

CALCULATING INCOME TAX

• STEP 1 - Calculate chargeable income

• STEP 2 - Calculate income tax

• STEP 3 - Subtract Tax Rebate

• Final - Payable Income Tax

Open Ended

What is chargeable income?

Open Ended

What is about tax rebate?

Chargeable income

• = total annual income - tax exemption - tax relief

TAX REBATE

• To reduce tax to be paid.

• 2 types - RM 400 if the chargeable income does not exceed rm 35 000 (subject to changes)

• zakat or fitrah

Open Ended

What is tax exemption?

Open Ended

How about tax relief?

TAX EXEMPTION

• all personal expenses such as donations, gifts, wakaf, contributions to the government etc.

• to promote caring society

TAX RELIEF

• expenses on goods or services that are not taxed.

• medical, EPF, insurance

• may change over time upon government policy.

TAX RATES

Annual income = RM 95 120

Tax Relief = RM 15 120

Donation = RM 500

• Chargeable income = 95 120 - 15 120 - 500 = 79 500

• Income tax for 1st RM 70000 = RM 4 600

• Income tax for the rest = ( 79500 - 70 000) x 21% = RM 1 995

• Total payable tax = RM 4 600 + RM 1 995 = RM 6 595

MONTHLY TAX DEDUCTION

(PCB)

ROAD TAX (Sabah & Sarawak)

-Fix

ROAD TAX (Peninsular)

• below 1600 cc - fix

Car 1 - 800 cc

Car 2 - 1850 cc

• Tax for 1st car = RM 20

• Tax for 2nd car = RM 280 + (RM 0.50 x 50) = RM 305

• Total tax = RM 20 + RM 305 = RM 325

Calculating Property Assessment Tax (PAT)

• PAT = Property assessment tax rate x annual value

• 
  

CALCULATING QUIT RENT

• Quit Rent = quit rent rate per unit area x total land area

Building area = 145 sq m

Estimated rent = RM 4.85/sq m

Rate = 5%

• Estimated rent monthly = RM 4.85 x 145 = RM 703.25

• PAT = 5% x (RM 703.25 x 12 maths) = RM 421.95

SALES AND SERVICES TAX

• sales tax differ based on goods 5% - 10%

• service tax rate is 6%