Assignment - BBEK2103 BACHELOR OF ACCOUNTING WITH HONOUR SEMESTER JANUARY 2016 BBEK2103 MICROECONOMICS MATRICULATION NO 891127145541002 IDENTITY

Assignment - BBEK2103 BACHELOR OF ACCOUNTING WITH...

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BBEK2103 BACHELOR OF ACCOUNTING WITH HONOUR SEMESTER JANUARY 2016 BBEK2103 MICROECONOMICS MATRICULATION NO: 891127145541002 IDENTITY CARD NO. : 891127-14-5541 TELEPHONE NO. : 016-2697339 E-MAIL : [email protected] LEARNING CENTRE : Negeri Sembilan Learning Centre Table of Content 0
BBEK2103 1.0 Introduction 2 – 6 2.0 Taxes Affects the Welfare of Consumers, Producers and Government 7 – 11 3.0 Subsidies Affects the Welfare of Consumers, Producers and Government 12 – 13 4.0 Conclusion 14 – 15 5.0 References 16 1.0 Introduction 1
BBEK2103 In economics, market failure is referring to a situation in which the allocation of goods and services is not efficient. That is, there exists another conceivable outcome where an individual may be made better-off without making someone else worse-off. A tax system is defined as a financial charge or other levy imposed upon a taxpayer (an individual or legal entity) by a state or the functional equivalent of a state to fund various public expenditures. When someone is failure to pay, or evasion of or resistance to taxation, usually it will lead to punishable by law. Taxes are also imposed by many administrative divisions. Taxes consist of direct or indirect taxes and may be paid in money or as its labour equivalent. A few countries impose almost no taxation at all, such as the United Arab Emirates and Saudi Arabia. In contrast, a subsidy is referring to a form of financial aid or support extended to an economic sector (or institution, business, or individual) generally with the aim of promoting economic and social policy. Although it commonly extended from government, it also can relate to any type of support - for example from non-government organisations or implicit subsidies. There are various form of subsidies, which including direct (cash grants, interest-free loans) and indirect (tax breaks, insurance, low-interest loans, depreciation write-offs, rent rebates). In Malaysia, there are various tax exist, which comprising income tax, corporate tax, and good and service tax. Different tax having different tax rate, for income tax rate is up to 26%, corporate tax rate is up to 25%, and good and sales tax is 6%. For the individual income tax rates in Malaysia are progressive, which are up to 26%, the personal income tax rates applicable to taxable income are as follows: Taxable Income per year (RM) Tax Rate RM 0 – 2,500 Exempt 2
BBEK2103 RM 2,501 – 5,000 1% RM 5,001 – 10,000 3% RM 10,001 – 20,000 3% RM 20,001 – 35,000 7% RM 35,001 – 50,000 12% RM 50,001 – 70,000 19% RM 70,001 – 100,000 24% RM 100,001 – 150,000 26% RM 150,001 – 250,000 26% Above RM 250,000 26% We are considered as tax resident if we are in Malaysia for 182 days or more in a calendar year. The corporate tax in Malaysia which mentioned above is up to 25%. Generally, corporations are taxed on income derived from Malaysia, but having the exception for banking, insurance, air transport or shipping sectors. Taxable income comprises all earnings derived from Malaysia, including gains or profits from dividend, interest, royalty and land trading business or other earnings. There are withholding tax rate shown below: Types of Taxable Income Tax Rate Interest 15% Royalty 10% Technical Fee 10%

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