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Disadvantages Of Tax In Malaysia

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If you earn an income, you must pay a tax. Nobody can run away from paying tax. However, a taxpayer may be an individual or an entity such as business that is obligated to pay a certain amount of their income to the government. Tax aids the government to improve and enhance the country by providing facilities and build infrastructure and resources for the society.

Tax can be catogerized into two category which is direct tax and indirect tax. Direct tax is a tax which the burden cannot be pass on to another individual. All income that is received by an individual will be taxed by the government from their allowance. One of the example of this category of tax is personal income tax. Direct tax consist of progressive tax as higher income group will be tax at a higher percentage from their income, whereas lower income group will be tax …show more content…

This means that an individual is possible to skip from paying tax to the government by transfer the tax burden to another person. One example of indirect tax is Value Added Tax (VAT) or it can also be called as Goods and Service Tax (GST) in Malaysia. This VAT is tax imposed on goods and services. When government imposed indirect tax in the country, supplier or producer will be able to passed on the tax burden by charging a higher price than the original price from the consumer and pay back to the government. Overall, at the end of the transaction in a business, the final consumer will be one who have to accept the burden to pay the tax. Indirect tax brings the pros that it will have a lower possibility for the society to run away from paying tax. Moreover, it is not as complex and pricey as direct tax for the government to collect. Indirect tax can also consequently lower down the unethical behaviour such as use of carbon or other toxic products which will harm the environment. Govenrment could also reduce the

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