THE OBLIGATION OF EVERY MALAYSIAN TO PAY INCOME TAX
THE younger generation is now more interested than ever in starting their own business.
Relevant skills in a chosen business as well as digital literacy are some of the factors for earning a lucrative income. With social media, many business owners are sharing their successes, profits, and luxurious lifestyle with the public.
While these social media stories have served as an inspiration to the younger generation to succeed as well, from another perspective, they can be seen flaunting their riches, especially for those who cannot afford the same lifestyle.
So, it is not wrong if company profits are shared through taxes paid to Lembaga Hasil Dalam Negeri Malaysia (HASiL, or Inland Revenue Board of Malaysia).
Based on the 2022 budget, income tax collection is the highest contributor to the country’s income at 35.7% compared to other sources such as indirect taxes, other direct taxes, revenue and non-tax loans and the use of public assets.
The government channels these financial resources towards development expenditure and the management of the country.
If all business owners fulfill their responsibilities as taxpayers, more income tax can be collected for the benefit of all Malaysians.
The government has allocated a substantial budget to safeguard the prosperity of the nation. When the country was battling the Covid-19 pandemic, where did the government get funds to set up facilities to treat patients if not from taxes paid by the people.
Additionally, the levies collected also helped the less fortunate when a host of businesses and small businesses had to file for bankruptcy due to movement restrictions.
Among the aids that the government has given to the people are Covid-19 Special Assistance (Bantuan Khas Covid-19) and Prihatin Special Grant (Geran Khas Prihatin). This is what it means to share the benefits collectively.
Income tax is the country’s main source of revenue used for development and operating expenses.
In recent viral news, a husband was surprised when he only had to pay less than RM20 for his wife’s medical bills even though she was treated for three days in a government hospital.
Likewise, the public also shared their experiences in the comments and expressed their thanks to fellow taxpayers who helped ease the financial burden on their fellow Malaysians.
Influencers are taxable
Personal income tax does not only apply to those who do business or work part-time, whether conventional or online, it also applies to professionals such as doctors who open their own clinics, lawyers with their own law firms or accountants with their own accounting firms.
Being an influencer is also a profession that can be taxed under the Individual with Business Income (Individual Berpendapatan Perniagaan) category.
Social media influencers are not something new as the younger generation have actively dabbled in this field and can earn up to five figures per month.
According to a study conducted by the Malaysian Communications and Multimedia Commission (MCMC) on December 29, 2022, nearly 90% of Malaysians own a smartphone and have access to the internet.
Businesses or companies use the internet to promote their products online to reach customers directly, as this method is also more affordable than traditional advertising in print, radio or television.
This is where social media influencers – those known as Instafamous, YouTubers, TikTokers – and businesses team up for product advertisements.
Influencers with a large following would typically receive lucrative payment from these types of ads.
This income is taxable and they should register with HASiL as a taxpayer.
A list of other income that may be taxed in the individual category can be viewed at www.hasil.gov.my. Discover:
1. Go to www.hasil.gov.my
2. Click on “Services”
3. Click on “Individual”
4. Go to “Introduction to Personal Income Tax”
5. Click on “When is it taxable”
I am taxable, what’s next?
Save your income tax records when you start a business, as individuals with business income are automatically eligible to pay taxes regardless of the minimum annual income amount.
If you do not have an income tax number, register online via the e-Daftar application at https://edaftar.hasil.gov.my/ and select Registration Form in line.
You will receive your income tax number within three business days of submitting the request.
You can report your business income for 2021 in Form B at mytax.hasil.gov.my via e-Filing and pay income tax via ByrHASiL by June 30 this year.
Those who use e-Filing have an additional period until July 15 to declare and pay their income taxes.
New taxpayers are well aware of their tax paying responsibilities, but may need guidance or advice in understanding their taxes.
HASiL offers group tax information sessions for businesses, associations and others, and can be conducted either face-to-face at your premises or online. You can email a request to [email protected] for this service.
It is important for everyone to understand what tax is and how it contributes to the country and the people – to fulfill your responsibilities as a taxpayer and ensure the prosperity and well-being of Keluarga Malaysia.