Is Treasury running on empty?
The Inland Revenue Board’s (IRB) Public Ruling No. 1/2006 on Perquisites from Employment, issued during the present Abdullah Administration on Jan 17, 2006, has come into effect.
Companies have started making deductions on transport and other allowances paid to their employees for income tax purposes, says The Star.
Such allowances are considered perquisites or perks, thus they are subject to Schedular Tax Deduction (STD) in line with the Income Tax Public Ruling.
'Transport & parking are perks, hence taxable'
Meanwhile, Inland Revenue Board Principal Assistant Director Rahimah Abdullah defined perquisites, via The Star, as "benefits in cash or in kind that were convertible into money received in relation to employment".
She added that taxable allowances included "those given for relocation, displacement, transport and parking, clothing, car wash, telephone bills and others".
If I understand her correctly, to the Treasury, these benefits are regarded as part of the gross income from employment, and therefore taxable.
Does it mean that the cash from your company pays you to pay the toll concessionaires, is the same cash that is taxable in your name?
Is the country running on empty? Who has the answer?
Comments
perhaps need to make us really tighten our belt further.
or
perhaps need to use it to pay for the new airplane
Thought government is elected to serve us, the citizen
Posted by: rw
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January 27, 2007 03:57 PM
Treasury knows rakyat got money. We can afford one of the highest car prices in the world so what is the small tax on travelling allowance. But I guess those flying in 200m plane need to worry about their travelling allowance.
Anyway, I always make claim for cab fares. So I guess I need to adjust the claim to include tax. Somehow, I think actual claim made to reimburse actual expenditure incurred for travel not taxable but only those recive flat rate such as travelling and parking or entertainment allowance. The toll maybe not taxable. Anyhow that 's how I been declaring my returns. Unless I screwed that up.
Posted by: LittleBird
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January 27, 2007 03:58 PM
Hi Jeff,
They need the extra money to pay for the new Airbus jet lah....
I believe reimbursements for out-of-pocket expenses actually incurred e.g. medical bills, travel mileage claims, actual toll claims are still not taxable - your employer is just paying you back for cash you already paid out in line of duty.
However those who receive a fixed allowance for e.g. transport without having to justify the actual expense - that would be taxable.
I don't mind paying even heavy taxes if the money were spent wisely and the government was administered efficiently. But there is so much waste and corruption in the system, and zero concept of careful, responsible custodianship in this administration - right up to and INCLUDING the Sleepy Guy.
Posted by: kittykat46
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January 27, 2007 04:02 PM
In the event if we were out of job, will the Government support us? Anyone ever cared if we have anything to eat?
Posted by: barney flinstone
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January 27, 2007 04:17 PM
What you should do is actualy ask your employers to convert your fixed allowances into reimbursables. For example, if you get a fixed RM500 for travelling allowances, change it to reimbursables by submitting your petrol receipts or car repairs bills.The company can then charge these out as company's expenses for works related to the company. The catch here is the word "fixed". Once it is fixed monthly, it is deemed a benefit , which you may or may not incur costs in performing your duities. One must do your tax planning properly, as there is no point in paying so much taxes when the Govt kept awarding inflated contracts to cronies to enrich the politicians. Why must we work so hard for them to drive their BMWs, dining at 5 stars' hotels, multiple mistresses, yachts, mansions etc ? Go get a job, cronies.
Posted by: maggieq
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January 27, 2007 05:34 PM
that is some thing i have been suspecting a long time, our Government coffers must be really empty, they are even going after the pennies and cents....
Posted by: TedRed
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January 27, 2007 06:13 PM
itu I*B pergi ma*poi-lah...
many of my colleagues working as salesperson would have such allowance because of the fact they need to travel/required to travel to customer site ...
JEFF OOI says: What you said is not exactly correct. According to the IRB spokesperson quoted by The Star, "taxpayers could claim tax deduction against the allowances if they had documented evidence to prove that the expenses were incurred as part of their duties or employment." In other words, more paperwork and more pencil pushers.
toll naik / minyak tak turun and now expect us to foot the tax for these so call *perks*
why not everyone just sit in office and then don't get sales !
work so hard so that we can sponsor these b**gers' driving luxury 4x4/bmw/merc ? pergilah *ati !
Posted by: cre8tif
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January 27, 2007 08:36 PM
As if it's not enough we work our whole live servicing one car loan after another because of the shitty transport setup, we now have to pay taxes for allowances which are supposed to cover our job requirements. So OK, compared to some other backward countries we are still far ahead!!! Big &%$#@!!!! deal.
(Sorry, couldn't help that....)
Posted by: LC Teh
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January 27, 2007 08:52 PM
Few months back, a friend told me he will be taxed for his car parking fees paid by his company. Another friend will also be taxed for his professional accredition fees paid by his company too.
We are indeed seem to be in deep shit. Result of 'prudent' sense of caring government?
What bothers me more are the unnecessary, stupid and mindless squandering, even till this moment. Meanwhile, don't forget to change our lifestyle, so that the ministers can keep theirs.
Posted by: hasilox
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January 28, 2007 01:59 AM
I feels like being robbed since Pak Lah came into power.
Minyak naik
Air naik
Tol naik
Now, even the IRB want to dip into our pocket.
But at this moment, I'm only earning a one Basic salary. So, the IRB new schedular tax regime won't affect me.
Posted by: menarinari01
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January 28, 2007 02:49 PM
menarinari01:
It might actually affects you. Perhaps your company don't provide separate allowances for the 'perks', but when you negotiate for your basic salary, didn't you put the transport(toll,parking,fuel) and phone bills as the criterias?
Posted by: Steve
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January 28, 2007 05:05 PM
Perhaps you should check with the IRB or some other tax expert before implying that our coffers are empty due to the latest ruling.
Allowances given by employers have always been taxable. It is only the employers that have not been subjecting these allowances to the schedular tax deduction system.
Your understanding of Rahimah Abdullah is incorrect. If you bother to check with the tax experts or IRB, I'm sure you'll have a better picture.
Jeff, please don't 'excite' your less knowledgeable readers.
JEFF OOI says: I trust what I read in The Star. It has checked with IRB before it published the story I quoted.
Posted by: KISS
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January 28, 2007 06:56 PM
Running dries? Huge gap on wealth equality? Rich become richer and poor become poorer under current tax scheme?
Worry not.
I dare the P-eM to bring back the inheritance tax (AKA Real-estate tax).
This will stabilize the wealth inequality issue and slow the excessive wealth gathering.
Don't argue, even Warren Buffet support it.
Posted by: moo_t
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January 28, 2007 07:13 PM
if i make official calls and i claim it later, shall i be taxed too? If i travel and i pumped petrol and toll, shall i be taxed too? aLL this money i spent for company. I dun even get a single cent, yet i need to pay tax for it? lame excuses....
"taxpayers could claim tax deduction against the allowances if they had documented evidence to prove that the expenses were incurred as part of their duties or employment."
lagi bodoh...we name it: Double Works
Posted by: Ah Hong
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January 29, 2007 08:54 AM
steve :
My salary is a very basic basic one. I don't travel, no tel reimbursement, no entertainment allowance, etc.
I just sit in the office and get a basic salary in the end of the month.
But I really do not support the schedular tax into these allowances.
Where's the rationale? If a staff reimburse RM60 for petrol, then the company will pay RM60 back to the staff. No tricks in that. But this IRB feels they want a share of that RM60 from us.
Posted by: menarinari01
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January 29, 2007 09:47 AM
Barney FLinstone....yes indeed. The government does not care if you dont have a job. In my case, they put my wife out of a job! BELIEVE IT! MAS (everyone knows, who their major shareholder is, Khazanah, Khazanah pumped in RM2B into MAS to turn it around, as reported in Cabinet)
But you know what?MAS Sacked my wife because we were expecting our third child! So she lost her job of 14 years, her first and last job! That was 3 years ago. According to the Collective Agreement between MAS and the crew, they are allowed only 2 children. She was given an option, terminate the pregnancy to save her job, or carry on and lose her job! What a choice! And to make matters worst, Our country's law clearly allows for 5 children. So we have a Goverment Linked company, using taxpayers money, but having this kind of Draconian law! Oh, did I mention Malaysia is a signatory to ratify the CEDAW, UNHCR? Go google on CEDAW!
So your take is absolutely right, the govt dont care. In my case, they are our problem! It took her 3 years before she could even get a job...and guess what?MAS Must be feeling guilty because they offered her some other job, after terminating her. Is that a precedent or what>?????
We are going to court, Feb 21st, Industrial court, but we were just told by the lawyers that they have the CA to hold us to, just because the CA was between 2 'private' entity! MAS is exempted from the law!
We will continue highlight this kind of discrimination, and hopefully one day, our Govt will do what is RIGHT! Fat hopes on that, but am still praying!
Tony Yew a.k.a alliedmartster
www.muststopthis.blogspot.com
Posted by: alliedmartster
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January 29, 2007 03:39 PM