The Advantages And Disadvantages Of Taxation In Malaysia

The issues of taxation

The federal government puts tax on everything, this allows them to take a percentage of our money away from us and use it for the country. Right now the US in debt and can’t afford to run this country alone. They use our money for several things everyday. However, there are limits to what the can tax such as; they can not tax Church services because it goes against our first ammendment right.

Business taxes can have a huge impact on the profitability of businesses and the amount of business investment. Taxation is a very important factor in the financial investment decision-making process because a lower tax burden allows the company to lower prices or generate higher revenue, which can then be paid out in wages, salaries and/or dividends. Business taxes include, Federal Income Tax; a tax levied by a national government on annual income, Payroll Tax; a tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee, Unemployment Tax; a federal tax that is allocated to unemployment agencies to fund unemployment assistance for laid-off workers, and Sales Tax; a tax imposed by the government at the point of sale on retail goods and services. Sales tax is based on a percentage of the selling prices of the goods and services. Consumers pay sales taxes, but effectively, business pay them since the tax increases consumer’s costs and causes them to buy less.

Taxes is when the state takes a percentage of the money you make to help the community or the state. Also one reason we get taxed is to pay off the government workers. Another reason we get taxed is to pay for the public buildings and public roads we use like libraries, schools, and highways. Finally another reason we get taxed is to help the poor or less unfortunate also to help an organization.

In 2016, individual income tax made up forty-nine percent, which is up five percent from 2015. Payroll taxes made up thirty-three percent, which was also up five percent from the following year. This was due to the growth in people wages and salaries. Corporate taxes made up nine percent, which fell thirteen percent from the following year. Excise taxes made up three percent and miscellaneous taxes rounded the budget at seven percent. The total revenues for the government in 2016 were $2.99 trillion dollars.

Taxes primary function is to pay for the government to provide our country with services such as national security, international relations, environment conservation, space exploration, agriculture stabilization, housing assistance, transportation infrastructure, education, unemployment assistance, health assistance, social security, veteran benefits, and administration of justice to name a few. As a society, there are a few questions that continually arise but are never decided upon. First, which services are considered merit goods, commodities that the public sector provides free or at a discounted price in order to encourage consumption (Britannica)? Second, how much of a merit good should be paid for by the government? Third, should the merit good be publicly or privately provided? Fourth, if there is a good which is not considered a merit good but has a large positive externality, should it be government subsidized? Lastly, should the wealthy contribute more taxes than the poor?

Taxation surrounds us in the world. Individuals fear tax, and a majority of the items we use and need are taxed. Even on topics such as Celebrities and the Olympics, taxation manages to find its way to still come up.

Taxes are the dollars that we pay to government to supply the services that are not or can not be provided through the free enterprise system. Taxes have been around since the beginning of organized societies. They come in various forms. Most common are income taxes both federal and local government. These taxes are assessed on the amount of income a person earns. Other taxes come in the form of user taxes; these taxes are imposed on the people that are using the goods being taxed, such as gas tax, alcohol tax, sales tax, and luxury taxes. Property taxes make up the major revenues for local and city governments. Furthering the burden of taxation are taxes that are attached to such bills as utility

The tax tends to lower the quantity of goods sold due to the price increase. The buyer does not wish to spend

Taxation is a levy or a charge imposed by a government on its citizens to raise revenue that finances public spending. The government of every country of the

Tax system is a legal system of imposing and collecting taxes from the citizens of the country. As it has been stated by Albert Einstein, the hardest task in the world is to understand the tax system of a country. The United States’ tax system is so complicated that its tax code contains almost 3 million words and 6,000 pages. Moreover, the taxes implied by city and state governments add more complexity to the federal taxation system. In this case, we do not need to understand the complexity of tax code system in order to get acquainted with the significant role of taxes in American society.

Malaysia is a democratic country with excellent economic system. We are one the leading country in economic terms and being an example for the economy system we are using. In Malaysia, we are into mixed economy system. This economy system is the leading type of economic system that is used in most of the countries such as United States. Mixed economy system includes a mixture of capitalism and socialism. It combines private economic freedom, centralized economic planning and government regulation. Government plays major role in economic growth as well as distribution of wealth. For example, our government collects tax and provides subsidies at the same time for the public.

Taxation systems are usually modeled in such a way that they take into consideration the social welfare of the citizens. The government and other policy makers have the responsibility of ensuring that the system takes into account the needs of the citizens. The bottom line is that taxation should foster equal distribution of resources. The rate of taxation is usually arrived at after several considerations have been made. The rates are not fixed as they depend on the various economic changes. The issue of how taxation should be distributed among the different economic classes is yet to be addressed.

I’ve summed up the introduction of Taxation to these slight words. Taxation is defined as a way that the government able to generate or collect revenue from the citizen of one’s nation through different sources. As what I’ve learned from Taxation course that there are two types of taxation, direct which are paid by the taxpayer directly to the government, and indirect which are collected by an intermediary (like a retail store) from the consumer. The intermediary who will file the tax return later and forward the amount of the money to the government with the return. This tax is applicable to organizations and individuals. In this reflection, I would like to highlight what I learned of business and individual taxation, the experience on working with a group for the project and what challenges I faced and how I was able to get past.

Continuous rapid economic growth has raised Malaysia from an agricultural and commodity-based low-income economy to a successful middle-income economy. As a mixed economy, Malaysia has elements of a free market economy nevertheless with intervention government. Malaysia's economic activity consist of a mixture of sectors whereas mixed of capitalism and socialism The strong economic performance has helped improve the quality of life for Malaysians and supported advances in education, health, infrastructure, housing and public amenities and others.