When you are in government service, you hardly pay any tax. I remember I was paying about RM 200 monthly for my PCB and even then, I can claim back some amount of money after my tax filling. My wife still enjoys this and she just got back about RM 600 for 2009. This is because, in government service, only the basic pay is taxable,all the allowances are not! This is one of the reason why our government service is not economical in long-term, for the country. Not only we have a bloated civil service(one of the highest in the world) but they hardy pay any tax as well.60% of our budget is on operational budget!
When I resigned from civil service in 2006 and joined Monash University, my PCB jumped to about RM 1.5 to 2K a month. Imagine, my tax per month is more than a year of tax paid by a civil servant of equivalent position. My tax for 2009 was RM 16K +!!! after using up the maximum deduction available in most category! I am at 27% bracket of tax now.
Since I am going full-time private his year, I decided to incorporate a company, as this is the best way to go about to reduce my tax. My tax consultant Jesudason is doing a great job advising me on this and I learned a lot of stuff from him even though it is still rather confusing. I decided to buy 2 books which I came across at MPH, “100 ways to save tax in Malaysia for small businesses” and “100 ways to save tax in Malaysia for individual“. I manage to read the first book and I must say it is still rather confusing! I am reading it for the 2nd time now, trying to digest it.
Sometimes, I feel so disgusted to pay tax, not because I don’t want to pay but our politicians uses the hard-earned money as though it is their grandfather’s money. Most of it goes to their cronies pocket!
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