(i) Outline and describe any three tax changes or measures which concern individuals and sole-proprietor businesses that were introduced by the 2014 Budget and their proposed implementation date. Briefly state why these changes were introduced in the 2014 Budget.
Introduction- Three Tax Changes
Malaysian Budget for the year 2014(Budget) was unveiled by the Prime Minister on 25th October 2013.The prime emphasis of the Budget was Strengthening Economic Resilience, Accelerating Transformation and Fulfilling Promises being formulated to warrant economic growth along with reduction of fiscal deficit . The Budget’s five focus areas are invigorating economic activity; strengthening fiscal management; inculcating excellence in human capital; intensifying urban and rural development; and ensuring the well-being of the citizens of Malaysia. In tandem with GST implementation, the Budget has brought about changes in tax for individuals . Accordingly, three prominent changes in personal income tax will be discussed hereon.
Review of Tax Rates
First, there has been an overall review of the current individual tax rates, with numerous beneficial changes proposed. At present, resident individuals in Malaysia are taxed at a graduated rate from 0% to 26% in accordance with Income Tax Act (ITA) 1967 .The Budget 2014 has proposed a reduction of individual tax rates by 1% to 3% across the various income categories, depending on the tax bracket .
The proposed tax structure and the ensuing reduction in tax are as follows:
Chargeable Income
(RM) Current tax rate
(%) Proposed Tax rate
(%) Reduction
(%)
1-5000 0 0 -
5001-20000 2 1 1
20001-35000 6 5 1
35001-50000 11 10 1
500001-70000 19 16 3
700001-100000 24 21 3
100,000-250000 26 24 2
250001-400000 2...
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...susceptible to fluctuations inherent in commodity markets. As witnessed in other countries GST offers one of the most simplistic mechanisms available for calculating receipts that in turn causes greater compliance of the code.
However, the concerns surrounding the regressive nature of the GST and how it could disproportionately affect low-income households need to be addressed in its design so as not to put further financial stress on the 56% of Malaysian Households with monthly income less than RM4000 .Also, the longer term impact that is beyond the temporary reliefs, of GST on fixed income employees should be handled with caution by the government. In short, with the added benefits as a bonus, GST has the potential to achieve the objectives of the 2014 Budget, requiring however minor modifications to address for its shortfalls in this to-be implemented system.
Wayne Swan 2010, ‘Budget Speech 2010-11’ Australian Government. Retrieved May 20th, 2010, from - http://www.budget.gov.au/2010-11/content/speech/html/speech.htm
The tax policy in the United States is very confusing. When the tax policy was originally written in 1913 it was four hundred pages. Now, over the past ninety one years, that tax policy has evolved to over 72,000 pages. Since the tax code has become so lengthy and nearly impossible to understand, the topic of tax reform has been in the minds of many. Although, most barely think about tax reform until tax season. It is a controversial subject due to the impact a change in tax code would have on the American people. The two most popular and widely known stakeholders in this debate are the two major political parties in the United States, the Democrats and the Republicans. The two parties share absolutely no common ground on the subject of tax reform, other than thinking the other parties solution is wrong. The Democrats, in general, want to raise taxes on the wealthy, while Republicans, generally, want to cut taxes for everyone (Democratic Party) (GOP). Unfortunately, with the United States economy currently doing so poorly, the parties can no longer afford to remain at a standstill, some sort of compromise is going to have to be made. The implementation of a flat tax, and discarding the current tax system would be a compromise that both parties can agree on and will simplify the tax code, overall benefiting all Americans.
Introduction Taxes; who benefits and who gets ripped off focuses mostly on Federal and county taxes and not on state taxes. This report aims to give the reader some insight on taxes: Why we have them, what types of benefits they supply, who benefits from them, and who gets screwed by them. It informs the reader of the different types of taxation, where the money comes from and where it goes. How can people avoid some tax increases? But most of all, this report informs the reader that there is an incredible amount of money being wasted by the federal government through overspending and irresponsible behavior of government departments. This overspending has created a deficit that has caused billions of dollars in damage to the credit of the country. As a result of these excess taxes, the American taxpayer is getting ripped off by paying for waste in government. Most people in this country are being ripped off in the amount of taxes they pay due to corruption gover...
While most taxpayers agree that tax reform is necessary for our country the problem they encounter is the difficulty they experience when trying to understand all the political terms used when discussing tax reform. This paper is an attempt to help the taxpayers of our country to better understand the political terminology and gain knowledge about some of the proposals that have been explored.
With the new 2014 to 2015 budget now in place, the changes that have been made will dramatically affect future government decisions when concerned with fiscal policy. In reference to the budget, they will need to rethink their expenditure, they will have to recalculate the tax needed to keep inflation steady, to bring the levels of unemployment down, to keep external balance solid and to keep the GDP under control.
“Taxation and Tax Reform.” Issues and Controversies. Facts On File News Services, 28 Jan. 2013. Web. 2 Dec. 2013
Governments in several countries, including the UK, Spain, Ireland and Hungary, have increased their indirect tax rates in recent years. Assess the likely economic effects of such a tax increase in a country of your choice. (20 marks)
Tax reform has undergone much debate in the political stratosphere recently. The tax system has been stigmatized because of a multitude of reasons that include corruption. Additionally, tax reform is a very complex issue. In addition, there has been an abundance of negotiations in Congress to pass some type of tax reform. Despite these talks, actual action has remained stagnant. This topic clearly reflects the collective action principle and the policy principle due to failed tax reform negotiations and the outcomes of various legislation.
While the tax rate and tax base of GST though are relatively low and narrow. “The current tax system is not going to keep up with the expenditure forecast. States haven’t got the fund to provide the services that community expects.” Mr. Tom Seymour (PwC tax managing partner). “Personal tax rates are already high in Australia and corporate tax is at the top of OECD corporate tax rates.” As a result of the limitation in reforming income tax and corporate tax, to provide more satisfactory public services, boarding the GST base and/or setting a higher GST rate is
Gurría, Angel. "Improve tax fairness and help the developing world." OCED. Organisation for Economic Co-operation and Development, 24/04/2009. Web. 9 Oct 2011. .
Malaysia is located in the south-eastern Asia, bordering Thailand and northern one-third of the island of Borneo, bordering Indonesia, Brunei, and the South China Sea, south of Vietnam. Due to its locations, it has been colonised since the late 18th centuries by many countries. Since 1965, Malaysia has had one of the best economic records in Asia, with GDP average of 6.5% growth for almost 50 years. The economical development especially boosted during 1981 and 2003 under the governance of Prime Minister Mahathir bin Mohamad. Malaysia succeeded in diversifying its economy from dependence on exports of raw materials to expansion in manufacturing, services, and tourism. Also, the current Prime Minister continues to pursue pro-business policies .
In conclusion, these new tax policies that our Malaysia government implemented will give a good impact on our company when we are new established and give a bad impact on our company’s sales when our company expands and annual turnover are exceed RM500, 000. The reflationary fiscal stance will decrease the profit of our
The famous literature on principles of taxation was embodied in Adams Smith “Canons of taxation”. Since then, economies have adopted (and adapted where necessary) these basic principles for what is regarded as the most important tool of fiscal policy.
As from 1 January 2010, the fiscal year is on a calendar year basis. Income Tax is payable by residents on non-exempt income derived from Mauritius less allowable deductions including interest on housing loan, subject ...
Later on in October 1992, the first announcement of GST implementation in Malaysia was announced by the then Minister of Finance, Dato’ Seri Anwar Ibrahim during his speech for the Budget 1993 but it was subsequently deferred (GST VINTAGE SDN BHD, 2013). This, however, was not mark the last time GST would be deferred again as Dato’ Seri Abdullah Ahmad Badawi did announce the implementation of GST for the year 2007 in year 2004 but again, the GST implementation was further deferred in 2006 (GST VINTAGE SDN BHD,