INTRODUCTION There are 2 types of taxes in Malaysia which are direct taxes and indirect taxes. Direct tax collection is carried out by the Inland Revenue Board (IRB) and the Royal Malaysian Customs Department (KDM) accounts for collecting the indirect taxes. Direct taxes, such as income tax, corporate tax, individual tax, petroleum tax and stamp duty, are levied directly on individuals who must pay it compulsorily. It cannot be avoided or transferred to another person. Another kind of tax is indirect taxes which imposed tax indirectly. For example, tax which levied on alcohol, purchase taxes, and customs clearance of imported goods such as cars and electrical appliances. This tax is imposed on a person and can be transferred to other people. For example, a businessman or a trader transfers the tax burden of a product to consumers by raising the prices of certain goods and products. Good and Services Tax (GST) is a tax newly introduced in Malaysia. Before implementing GST, Malaysian tax system was enforced through the Sales Tax Act 1972 (Act 64) and Tax Service 1975 (Act 151). These two legislation were under the control and supervision of Malaysian Customs. The implementation of GST will raise government’s revenue and allow more revenue distribution to low-income earner, thereby the gap of the economies will become smaller between the people.
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- Fall '16
- Government, Types of Taxes