Tax collected through the IRBM is channelled for the nation’s betterment.
AS Malaysia is hit by the Covid-19 pandemic that has greatly impacted people from all walks of life, there are those among us who need government assistance more than ever. Some are even forced to rely on financial assistance from the government to help them get by, with numerous lives affected by a sudden loss of income.
To date, the government has spent an enormous amount of money to not only help people in financial distress, but also to improve and upgrade our existing medical infrastructure in the fight against the pandemic.
Ever wonder how the government is able to afford this? It’s thanks to contributions from taxpayers, channelled into the Inland Revenue Board of Malaysia (IRBM), that help fund these initiatives for public good and nation-building.
Some may consider it a burden, but because you pay income tax through Monthly Tax Deductions (MTD), you can actually stand to save some extra money – something we can all look forward to every year! – by claiming the available tax reliefs and deductions you are eligible for. As these may reduce the chargeable income tax you need to pay, you could receive a tax refund from IRBM that can be added to your savings for a rainy day.
Are you a taxpayer?
Taxpayers are defined as those who receive an annual income of more than RM34,000 after deduction for the Employees Provident Fund (EPF), which makes them eligible to be charged for MTD. Therefore, taxpayers need to register your income tax files with the IRB.
Starting March 1 every year, those eligible to pay tax must declare their income and pay the appropriate tax to IRBM through ez.hasil.gov.my.
That said, during the recovery movement control order (RMCO) period, IRB has extended the period granted to submit your income tax form. For individuals without business income, you have until June 30 to submit your BE Form (e-BE), while individuals who receive income from business (e-B) have until Aug 31 to submit your form.
What are this year’s tax reliefs?
Although some people may regard income tax as a big burden to pay, it is mostly because of a lack of understanding about the taxation system. In fact, you may still be unaware that the income tax imposed can actually be reduced through tax reliefs, which are tabled during the annual budget presented by the government every year.
For the Year Assessment (YA) 2019, there are 21 tax reliefs that you can claim if you are eligible. A tax relief reduces the amount of your aggregate income, which in turn reduces your chargeable income.
What tax deductions are available?
Apart from tax reliefs, you may also be eligible for tax deductions. A tax deduction is quite similar to tax relief, but while tax relief is a deduction from the total income to derive your chargeable income, tax deductions reduce the amount of total income. This will certainly help you reduce the amount of tax that you need to pay.
You can deduct up to 7% of your aggregate income for donations, gifts or contributions that fall under these categories:
> Gift of money to approved institutions/ organisations/ funds;
> Gift of money for any approved sports activity; and
> Gift of money or cost of contribution in kind for any approved project of national interest.
There are also categories that are not limited to this 7% of your aggregate income, where it can be up to the value of the gift unless otherwise stated, such as:
> Gift of money to the government/state government/local authority;
> Gift of artefacts, manuscripts or painting;
> Gift of money or contribution in kind for disability facilities in public places;
> Gift of painting to the National Art Gallery or state art galleries;
> Gift of money for libraries not exceeding RM20,000; and
> Gift of money or medical equipment not exceeding RM20,000 to approved healthcare facilities.
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Sharing your sustenance with others
At the end of the day, paying income tax should not be considered a burden if you really understand the concept: it’s really about sharing your sustenance with others.
How do you feel when you are able to help those in need, like the underprivileged and the B40 community? Most of us will feel happy and satisfied to have done a good deed, when we see them gratefully receiving our gifts and donations.
You can make a difference on a larger scale by paying your income tax, as the money will be used by the government for the benefit of all Malaysians.
Now that you are aware of how to reduce your chargeable income by claiming tax reliefs, list down all the ones you are eligible for and file in your income tax forms to IRBM before the deadline.
As an individual without business income, you have already been paying your income tax throughout the year in the form of MTD. This means the more tax reliefs you claim, the bigger the tax refund you will get in return. If you think about it, it is indirectly saving your money annually with IRBM.
What’s important to keep in mind is that all our educational facilities, economic development and the peace we enjoy are the outcome of your contribution.
Declare and pay your income tax at ez.hasil.gov.my. Together, we can show our love for Malaysia by doing our part to ensure the country’s prosperity. For further information, contact the HASiL Care Line at 03-8911 1000 or visit the IRBM official portal at www.hasil.gov.my.This article is courtesy of the Inland Revenue Board of Malaysia.
