Malaysia’s

Direct &
Indirect
TAXES
By: Adam, Aiman & Syameer
All info is taken from the 2020 budget
 Introduction

There are two different kinds of taxes in Malaysia which are a direct and indirect
tax. A direct tax is a tax that is levied on a person or company’s income and
wealth. The tax is paid directly to the government. Examples of direct tax are
income tax and real property gains tax. The body who is in charged with the direct
tax is LHDN (Lembaga Hasil Dalam Negeri Malaysia)
 01
Direct Tax
Money, money, money
 Personal Income Tax Act (PITA)

Direct tax is levied on the income or profits of the

person who pays it, rather than on goods or
services:

Income tax is progressive tax since the tax

rates are lower for the people earning lower
wages and higher for the ones earning more.

The government made 37,363 MYR from

income tax In 2020 making up 45.1% of the
2020 buget
 Companies Income Tax Act (CITA)

A corporate tax, also called corporation tax or

company tax, is a type of direct tax levied on
the income or capital of corporations and
other similar legal entities.

Cooperate tax is progressive tax since the tax

rates are lower for firms earning lower wages
and higher for the ones earning more.

The government made 75,510 million MYR

 02
Indirect Tax
More money, money, money
 Sale Service Tax (SST)

Indirect tax is a tax levied on goods and

services rather than on income or profits.

SST refers to the Malaysian sales and service

tax, where a sales tax is imposed at the
manufacturer level, and a service tax is paid
by consumers who are using taxable services.

The government made 28.3 million in SST for

the 2020 buget

SST is regressive since a type of tax that is

assessed regardless of income, in which low-
and high-income earners pay the same dollar
amount
 Excise Duty Tax

Excises are indirect taxes levied by tax authorities on the consumption of specific
products or services (often considered to be harmful for consumers' health and the
environment, or luxurious products)

Excise tax can be regressive it is likely that lower-income groups would spend a larger
proportion of their income on the taxed items than would higher-income groups.
However excise taxes can also be considered proportional since everyone is taxed at
the same rate.

The government made 11 million MYR from excise tax on 2022

 Import Duty Tax
Import duty is a tax collected on imports and
some exports by a country's customs authorities.
A good's value will usually dictate the import duty.
Depending on the context, import duty may also
be known as a customs duty, tariff, import tax or
import tariff.

Goods imported into Malaysia are subjected

to Sales & Service Tax (SST) of 10%, and these
goods can be anything from food items to
electronics. Import tax is proportional since its
doesn't change.

The government made 2.8 million MYR from

import duty tax in the 2020 buget
 Export Duty Tax

Export tax is a tax on goods going out of the

country

Export duty tax is proportional since the tax rate

is fixed

The government made 1.3 million MYR from

import duty tax in the 2020 buget
 Sources
MOF Budget 2020

2020 Budget Pie

Le Thank You
oui oui oui oui
BONUS
SLIDE
HOW TO EVADE
LE TAX
without getting the popo or money takers (IRS) involved