When the tax department (LHDN in Malaysia) says it will be able to collect higher taxes next year, it tells us two potential scenarios. One is that the tax rates may be going up. It means everyone will have to pay higher taxes. This is not such a good news. Fortunately, there has been no announcements that the personal or even business tax rates will be adjusted anytime soon effective immediately.
Second scenario is that the people earns higher income and businesses do better than the year before. This is certainly good news because it also showed that the economy is doing well and that perhaps this year is going to be better than the year before. Well, when we compare 2021 to 2020, I think 2021 is going to be a better year. We even have vaccinations for COVID-19 in progress.
Article in hmetro.com.my The government says that LHDN is targeting to achieve a tax collection of RM143.9 billion for year of 2021. Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz shared that LHDN managed to collect a total tax of RM123.09 billion for year 2020 and this is 1.14% higher than what was targeted earlier which was RM121.7 billion. Do read the full article here: Article in hmetro.com.my
2021 is really going to be a better year than 2020
The GDP predictions for 2021 are all positive thus far. One major reason is also because the countries have started to win the war against COVID-19. Earlier world economic growth predictions here: Global economic growth for 2020 and 2021. So, perhaps what LHDN is targeting for 2021 is likely to happen. Let’s not forget the fact that many of the consumption which could have happened in 2020 would now be happening in 2021 too.
Perhaps some of the travelling which did not happen in 2020 and 2021 would also happen in 2022. Let’s wish 2022 tax collection could be even higher.
My mother’s advice when I started working
I told my mother that I was paying a higher tax than the year before. My mother responded that the reason why I was paying a higher tax was because I was earning more. The question is, do I wish to earn more because only with earning more that I would be taxed more. I have since focused on earning more instead because taxes, well we could not escape from it. Just do best earn higher and then pay higher yeah.
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