They say only taxes and death are inevitable.However it is good that the IRS is improving their services to taxpayers so that paying taxes will be as painful as donating blood.
A few suggestions to reduce the tax problems of Malaysians:
The IRS should encourage taxpayers to opt for "Pay as You Earn" for all those earning RM2000 per month and above.
The standard monthly deduction would be pegged as a married person opting for separate assessment and with 2 children below 21 years old and needing support with some standard allowances for EPF, insurance and medical expenses.
The final assessment is made after the taxpayer submits a new form to declare dividends and other supplementary income like bonus received in the same year and married status and number of eligible children.
According to the report,
Hasmah said such problems cropped up because bonuses for a particular year were paid the following year or on a staggered basis.
It is suggested that bonus for wage-earners be treated as and when received and not complicate prior years tax liability.
I expect about 80% of wage-earners would have a tax credit with the IRS and this should be refunded within three months and not the years it currently takes for unknown reasons.
Self-assessment is also difficult for many wage-earners and I think the previous scheme was better for taxpayers.
It is like adding more salt to the wound - it is painful to declare the income and then you even have to calculate how much the actual taxes will hurt.
PAYE is also good as it takes care of most of your tax problems and will be a form of savings if you are due a refund.
Of course the IRS is expected to refund within a grace period of say 3 months or pay interest at bank rates if refunds are delayed.
Assuming the IRS computer system is secure, taxpayers should be able to check online if the employer has actually paid the monthly taxes.
picture: Thanks to http://www.skd-dresden.de/media/images/museen/muenzkabinett/300_muenzkabinett.jpg
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