Quotes Inspired by LHDN Malaysia

"A necessary evil-the price of a civilized society"

That is how governments argued about tax. LHDN Malaysia like its counterparts worldwide is the machinery that makes you and I pay that price.

Did Wan make this up? Go to the Internal Revenue Service Building in Washington D.C. and see for yourself an inscription:

"Kita membayar cukai-cukai untuk masyarakat bertamadun" (1)

Extremely Oppressive Tax

France used to levy very high taxes on salt. Many poor people could not afford salt which cost a family's income for one month. Children as young as 8 years old were taxed on salt. Anyone who dared to sneak out of his hometown to buy cheaper salt elsewhere risked punishment of forced labour on ships. No wonder this infamous salt tax, gabelle, became one of the factors leading to the French Revolution. The people displayed their great hatred for gabelle by guillotining 32 tax collectors!

Malaysians are more fortunate, we only have LHDN Malaysia...

"Jika aku membanting tulang, segalanya dirampas daripadaku."(2)

-Peribahasa Babylon, lebih kurang 2300 sebelum masihi.

A Barometer

Tax systems in developing lands are often inefficient and unfair. For example, a researcher commenting on taxes in an impoverished African country: " Proper collection and monitoring mechanisms are either non-existent or NOT APPLIED ( upper cases mine )...creating opportunities for misuse." Does it seem like a familiar scene when you have to deal with LHDN Malaysia?

For taxpayers who have a chance to look at their records and found out LHDN Malaysia has not updated their addresses, sent the tax assessments to the old, invalid addresses then amazingly used the updated addresses to accuse the taxpayers of dodging taxes ( so that they can charge the penalty )...what is the Malaysian tax system reflecting? Anywhere nearer to Wawasan 2020? I don't dare to answer, your discretion...

Classifying taxpayers

1.Payers- Most people belong to this category. It is a fact that governments need tax money to finance many essential services. At least payers begrudgingly acknowledge without taxes, there will not be schools, hospitals, garbage collection and the fire brigades if their houses were on fire! I hope LHDN Malaysia does not take these reasonable people for granted.

"Tidak ada orang yang gemar membayar cukai, tetapi tidak banyak orang yang membantah bahawa kita akan mendapat manfaat tanpanya." - Ketua Hasil Dalam Negeri Britain.(3)

2.Avoiders- These are people who find ways to avoid paying certain taxes. Ah...looking for the loopholes! U.S.News & World Report in an article gave an example of a U.S.corporation setting up a firm in a foreign tax haven, then it turns the U.S. operation into a subsidiary of the foreign company thus sparing the company from paying U.S.taxes (max. 35 percent )- even though the headquarters maybe little more than a filing cabinet and a mailbox. The same article also comments about corporate taxes:

"Banyak syarikat secara sah mengelak sebahagian besar daripada tanggungjawab mereka- dan kadang kala kesemuanya- melalui potongan cukai dan muslihat perakaunan."(4)

There is also another reason noted by a tax authority:

"Banyak yang tidak mematuhi ( pembayaran cukai ) disebabkan masalah dengan undang-undang dan prosedur, dan bukan pengelakan secara sengaja." (5)

3.Evaders- LHDN Malaysia should knock on their doors. In one European nation, out-and-out tax evasion is viewed as a "national sport"! I wonder how many and who are these "sport enthusiasts"? Maybe an observation from a book The Decline ( and Fall?) of the Income Tax gives you an indication:

"Alangkah sedihnya pegawai-pegawai atasan kerajaan kita, presiden kita, tidak memainkan peranan sebagai teladan sempurna yang memberikan inspirasi kepada rakyat biasa untuk mematuhi undang-undang cukai." (6)

Conclusion

Dealing with LHDN Malaysia means dealing with mind-boggling complex income tax laws and a system designed to exasperate most of us, the rakyat biasa. The famous quote from U.S. statesman Benjamin Franklin however, helps me to see the positive side of it:

"Dalam dunia ini, tidak ada apa-apa yang pasti kecuali kematian dan cukai-cukai." (7)

I would rather be alive to pay my taxes...

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How much have you understood?

1."Taxes are what we pay for a civilized society."

2."If I toil it is snatched away from me."-Babylonian proverb about 2300 B.C.E.

3."Nobody enjoys paying income tax, but few people argue that we would be better off without it."- the head of the British Inland Revenue.

4. "Many firms legally skirt a large share of their liability- through tax breaks and accounting maneuvers." -an article in U.S.News and World Report.

5. "Much non-compliance stems from difficulty with the law and procedures, rather than from wilful evasion."

6. "Sadly, our highest government officials, our presidents, have also been far from perfect role models in inspiring ordinary citizens to obey the tax law."

7. "In this world, nothing is certain but death and taxes."

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