Have you optimized your 2012 tax ? Last call !

Do you know that you can actually save up to RM 925 by paying attention to your tax even if you are only earning Rm 3,000 a month ?  The example is illustrated here !

This is a reminder last CALL for you to optimize your 2012 tax.  IRB may actually pay you a bonus this year !

GST : What can we do ?

Some said GST is good, some not.  The myth how we pay less tax and yet government can earn more money has already been answered.  But GST is coming regardless, so what can we do ?  If you haven't related the answer from "the prefect world" article yet, then may be this article may help ...

Widget : How Much Tax Can I Save ?

Half of year 2011 has already passed. Have you ever thought of your next tax filing yet ? If you only take a look by next year, then it may be too late for you to optimize anything anymore. Try below widget and see how much the impact may be for you ! Just enter your total annual income and see how much tax you can save simply by planning early !!

Income Tax : Plan vs Not, how much difference ?

Income Tax, to plan or not to plan. Or more precisely, plan now before year end or only worry about it when you file tax next year ... How much is the difference actually ?

A Perfect World

In a perfect world, everyone produce something.

Farmers grow plants, feed chickens, fishermen catch fish, builder made homes etc. So we can sit together at night and enjoy a complete dinner in our nice homes. It was easy to know who is suppose to do what, who produces what.

When there are too many fish caught, it has to be sold out of town. The fisherman doesn't have time to travel that far. So a delivery boy is helping the fisherman. The fisherman save time, hence catch more fishes and therefore its worth him paying the delivery boy. It is a value added chain, so service has become a part of perfect world too where everyone produce something, everyone produce some values.

It gets a bit complicated cause service is not as easy to quantify as materials. But its still ok.

A $1 fish may cost $2 in out of town because there are delivery cost incurred.

Soon more delivery services are needed. It is not easy to decide which of the 100 delivery boys is most reliable. So a manager came and organize a delivery company. The fisherman no longer need to worry about delivery, the delivery company will handle and be 'responsible' for the delivery part. If any single delivery boy does not perform, the company will immediately replace with a better one. Fish still reach destination on time. The fisherman doesn't need to worry a thing. What the management provided is a service on a service, there is still value provided.

Now the fish is $3 in out of town. The manager needs to eat too.

The fisherman's business grow much larger thanks to the great leveraging techniques. One day, the fisherman's primary school friend drop by and have a nice chat with the fisherman, asking the fisherman to let him handle the delivery part. Because he is more trust worthy, that they have known each other for so long etc. The fisherman agreed, perhaps due to the drinks or due to the flowery talks.

The primary school friend simply take orders for the fisherman and pass to the delivery company. Jobs still get done as usual but while doing that, he has raised the fish price to $5 in out of town. He gets $1 just for the deal he made. The fisherman gets $1 extra simply by letting his primary school friend take over the delivery part. The delivery company has nothing to loose.

Now it gets really tricky.

What did the primary school friend produces ?

What value has he added ?

What service has he provided ?

You can't say he has done nothing. He is instead smart, creating something from nothing. Is creativity really worth nothing ? He capitalize his relationship into a real asset.

The fisherman gets more value ( money ), the primary school friend earn something, the delivery company didn't loose anything. So theoretically speaking, the primary school friend has added value to the fisherman and himself. So it doesn't really break the law of perfect world.

The smart you may have already spotted the difference.

But at whose price ? Out of town folks used to pay $3 for a fish. $1 for the fisherman, $1 for the manager to make sure fish reach them on time and $1 for the delivery boy. Now the fish is $5! What is the other $2 for ? Well, that has nothing to do with any value received by the people in out of town. That was just a deal made between a primary school friend and the fisherman. The fisherman and the friend gets the whole $2!

Smart yes, add value to one or two persons yes, nothing wrong was done yes .... but whatever the primary school friend did, should NOT be included in the formula of 'PERFECT WORLD'.

In a perfect world, everyone produce something

FOR EVERYBODY.

Sounds familiar yet ? If not, may be you haven't read about Malaysia's GST yet.

This article was suppose to be read in this sequence.

Malaysia's GST - a MAGIC !

Secrect of the MAGIC revealed !

a Perfect World !

What can we do ?

the Magic of GST - reveal !

The 2 sides of GST are shown earlier, one is generally the consumer side who say NO, the other is the government side who say it will be OK.

The "magic" highlighted is everyone pay less and yet the government can earn more, how is that possible ?

• Tax payers will pay less tax
• Industries will save money
• Government can earn more money

First of all, the trick in that statement is 'tax payers'. Malaysia has about 27 millions people, only 1 million is paying taxes. So the rest of the 26 millions people who are NOT paying taxes now will be affected once GST is on. Even your underage kid buy a candy tomorrow, GST would have been included (depends on at which level of the distribution channel). So you "MAY BE" paying less tax, but everyone else in your family will be paying GST. Thats why you pay less tax and yet government can collect more, from people around you.

Secondly, not ALL industries will save money. This is a lengthy strategical discussion but in short; industries who optimize and/or shorten their distribution channels will survive, while others who don't will be dead. ( assuming everyone play fair and nice ). So small boys will die off, big boys will take over their market. Who pay the government more money ? Yes, the big boys. So big boys grow bigger and government gets more $.

Lastly, government doesn't really earn more money, at least not now. You see, the biggest income of the country comes from petroleum and this natural resource is going to end soon ( in less than 10 years ? ) So where else can the government continue to get the money from ? Well, what is the biggest asset of a country ? Its people. So GST will diversify the country's income portfolio. In other words, a country that live on GST income is self sufficient ie. the people are keeping their own country alive. Sounds nice isn't it ? Again, assuming everyone play fair and nice ya.

The panic of general public is only valid if one day we lost the income from petroleum and the similar income is projected into GST directly. I haven't done any calculation yet but I wouldn't be surprise that will be equivalent to 80% GST. So what will happen in coming near future is the increase of GST almost exactly as how it has been done with our petrol prices. May be you will see a GST 95 and GST 97 story ?

Worry no more, the next article will share "what we could do" . . . but before that, we may have to talk about "a perfect world" in order to really understand "what we could do".



This article was suppose to be read in this sequence.

Malaysia's GST - a MAGIC !

Secrect of the MAGIC revealed !

a Perfect World !

What can we do ?

the sides of GST

Actually GST is good, at least in theory. In practice, it could really go either way. And either way could mean good or bad for somebody and not everybody. This has already been proven in many countries who has adopted GST for ages. But one thing for sure, GST gives the government full Flexibility.

Now or in the past, it started with "I will tax this and that". So sales tax, service tax, government tax, custom tax etc. were introduced. With GST, it started with "I will tax everything" except those I give exceptions.

So system wise, GST is also better. Or in another word, GST is more systematic.

Most people may have known the devil of GST from many blog posts by now, but seriously if you look at the topic with a clear mind and NOT just from consumer point of view, you may realize those are really just purely speculation. However, it may still happen but when it does, it is because the consumers ourselves are making it happen. By thinking it might happen.

Interestingly however, not many people know the official GST info. What is the government thinking with regard to GST ?

• Tax payers will pay less tax
• Industries will save money
• Government can earn more money ( diversify income actually )
• GST will not impact inflation etc.

Got it ?

People who buy will pay less,

people who sell will pay less and

government will have more money.

Interesting or not ? its MAGIC !!

At the end, it really doesn't matter what the big boys are doing. What really matter is what affects you. So forget about agreeing or disagreeing with GST. IT WILL HAPPEN ! You may as well start thinking how to make use of this GST to turn yourself into a part of the HIGH INCOME GROUP.

For that, you may want to check out .... Exempted stuffs


This article was suppose to be read in this sequence.

Malaysia's GST - a MAGIC !

Secrect of the MAGIC revealed !

a Perfect World !

What can we do ?

Individual Income Tax Relief 2010

List of Tax Relief for Resident Individual 2010

No.	Individual Relief Types	Amount (RM)
1	Self and Dependent	9,000
2	Medical expenses for parents	5,000 (Limited)
3	Basic supporting equipment	5,000 (Limited)
4	Disabled Individual	6,000
5	Education Fees (Individual)	5,000 (Limited)
6	Medical expenses for serious diseases	5,000 (Limited)
7	Complete medical examination	5,00 (Limited)
8	Purchase of books, journals and magazines	1,000 (Limited)
9	Purchase of personal computer	3,000 (Limited)
10	Net saving in SSPN's scheme	3,000 (Limited)
11	Purchase of sport equipment for sport activities	300 (Limited)
12	Subscription fees for broadband registered in the name of the individual.	500 (Limited)
13	Interest expended to finance purchase of residential property. Relief of up to RM10000 a year for three consecutive years from the first year the interest is paid. Subject to the following conditions: (i) the taxpayer is a Malaysian citizen and a resident; (ii) limited to one residential unit; (iii) the sale and purchase agreement is signed between 10th March 2009 and 31st December 2010; and (iv) the residential property is not rented out. Where: (a) 2 or more individuals are eligible to claim relief for the same property ; and (b) total interest expended by those individuals exceeds the allowable amount for that year , Each individual is allowed an amount of relief for each year based on the following formula: A x B C where; A = total interest allowable in the relevant year; B = total interest expended by the relevant individual in the relevant year; C = total interest expended by all the individuals.	10,000 (Limited)
14	Husband/Wife/Alimony Payments	3,000 (Limited)
15	Disable Wife/Husband	3,500
16	Ordinary Child relief	1,000
17	Child age 18 years old and above, not married and receiving full-time tertiary education	1,000
18	Child age 18 years old and above, not married and pursuing diplomas or above qualification in Malaysia @ bachelor degree or above outside Malaysia in program and in Higher Education Institute that is accredited by related Government authorities	4,000
19	Disabled child Additional exemption of RM4,000 disable child age 18 years old and above, not married and pursuing diplomas or above qualification in Malaysia @ bachelor degree or above outside Malaysia in program and in Higher Education Institute that is accredited by related Government authorities	5,000
20	Life insurance dan EPF	6,000 (Limited)
21	Premium on new annuity scheme or additional premium paid on existing annuity scheme commencing payment from 01/01/2010 (amount exceeding RM1000 can be claimed together with life insurance premium)	1,000 (Limited)
22	Insurance premium for education or medical benefit	3,000 (Limited)

Individual Tax exemption in Malaysia

Below shows an extraction from Malaysia Income Tax department. Some of the highlights are;

1. maternity expenses, traditional medicines exemption are UNLIMITED !
2. if you were terminated with compensation, some are exempted !
3. Scholarship is exempted, so study Hard !
4. Income derived and remitted from oversea is exempted, so globalize your business !

Do take time and go through below details, I am sure it will spark some innovative ideas if you are in the midst of optimizing your tax plans.

source

Leave passage

Leave passage within Malaysia not exceeding three times in a year and one leave passage outside Malaysia not exceeding RM3000.

Medical and dental benefit

With effect from the year of assessment 2008, medical benefits exempted from tax is expanded to include maternity expenses and traditional medicine like ayurvedic and acupuncture without limit.

Retirement gratuity

The full amount of gratuity received by an employee on retirement from employment is exempt if:

i. The Director General of Inland Revenue is satisfied that the retirement is due to ill health;

ii. Retirement on or after reaching the age of 55 years/compulsory age of retirement and the individual has worked 10 years continuously with the same employer or companies within the same group

iii. The retirement takes place on reaching the compulsory age of retirement pursuant to a contract of employment or collective agreement at the age of 50 but before 55 and that employment has lasted for 10 years with the same employer or with companies in the same group.

Gratuity paid out of public funds

Gratuity paid out of public funds on retirement from an employment under any written law.

Gratuity paid to a contract officer

Gratuity paid out of public funds to a contract officer on termination of a contract of employment regardless of whether the contract is renewed or not.

Compensation for Loss of Employment

This is payment made by an employer to his employee as compensation for loss of employment either before or after the date of termination.

This compensation is exempted from tax

1. If compensation received is due to ill health
2. Compensation received in other cases:
1. Termination before 1st July 2008 - exemption of RM6000 for every completed year of service with the same employer or with companies in the same group
2. Termination on or after 1st July 2008 - exemption of RM10000 for every completed year of service with the same employer or with companies in the same group

Compensation received by a director (not service director) of a Control Company is fully taxable.

Pensions

Pensions received by an individual are exempt under the following conditions:

1. He retires at the age of 55 or at the compulsory age of retirement under any written law; or

2. If the retirement is due to ill health and the pension is received from the government or from an approved pension scheme.
   

For an employee in the public sector who elects for optional retirement, his pension will be taxed until he attains the age of 55 or the compulsory age of retirement under any written law. Where an individual receives more than one pension, the exemption is restricted to the highest pension received.

Death gratuities

Monies received as death gratuity is fully exempted from income tax.

Scholarships

Any monies paid by way of scholarship to an individual whether or not in connection with an employment of that individual is exempted from income tax.

Income of an individual resident in Malaysia in respect of his appearances in cultural performances approved by the Minister

Money received under this category is exempted from tax on condition it is approved by the Minister.

Interest

Income in respect of interest received by individuals resident in Malaysia from money deposited with the following institutions is tax exempt with effect from 30 August 2008:

1. A bank or a finance company licensed or deemed to be licensed under the Banking and Financial Institutions Act 1989;

2. A bank licensed under the Islamic Banking Act 1983;

3. A development financial institution prescribed under the Development Financial Institutions Act 2002;

4. The Lembaga Tabung Haji established under the Tabung Haji Act 1995;

5. The Malaysia Building Society Berhad incorporated under the Companies Act 1965;

6. The Borneo Housing Finance Berhad incorporated under the Companies Act 1965

Dividend

The following dividends are exempt form tax:

1. Dividends received from exempt accounts of companies.

2. Dividends received from co-operative societies.

3. Dividends received from a unit trust approved by the Minister of Finance such as Amanah Saham Bumiputra.

4. Dividends received from a unit trust approved by the Minister of Finance where 90% or more of the investment is in government securities.

Royalty

Royalties received in respect of the use of copyrights/patents are taxable if they exceed the following exemption limits:

No.	Types of Royalty	Exemption (RM)
1	Publication of artistic works/recording discs/tapes	10,000
2	Translation of books/literary works of Education or Attomey or General Chambers	12,000
3	Publication of literary works/original paintings/musical compositions	20,000

However, the exemption stated above does not apply, if the payment received forms part of his emoluments in the exercise of the individual's official duties.

Income Remitted from Outside Malaysia

With effect from the year of assessment 2004, income derived from outside Malaysia and received in Malaysia by resident individual is exempted from tax.

Fees or Honorarium for Expert Services

With effect from the year of assessment 2004, fees or honorarium received by an individual in respect of services provided for purposes of validation, moderation or accreditation of franchised education programmes in higher educational institutions is exempted.

The services provided by an individual concerned have to be verified and acknowledged by the Malaysian Qualifications Agency (MQA). However, the exemption does not apply if the payment received forms part of his emoluments in the exercise of his official duties.

Income Derived from Research Findings

With effect from the year of assessment 2004, income received by an individual from the commercialization of the scientific research finding is given tax exemption of 50% on the statutory income in the basis year for a year of assessment for 5 years from the date the payment is made.

The individual scientist who received the said payment must be a citizen and a resident in Malaysia. The commercialized research findings must be verified by the Ministry of Science, Technology and Environment.

When to go beyond "Salary" ?

When your personal income increases, you start to pay more taxes too. It was mentioned before there are certain income Stepping that one should watch out for to optimize tax planning. For example, as your total annual income is approaching MYR 100,000 in Malaysia, you are most likely to be paying maximum taxes like a company's ie. 27%.

So you pay about MYR 15,000 taxes so your net income become MYR 85,000 ( exclude other deductions for the purpose of this article ). Then you will proceed paying your due diligences like house loan, car loan and all your other expenses etc. Lets say those total up to MYR 73,000 so you would have a remaining income of MYR 12,000; Or MYR 1,000 a month.

As mentioned before, if the taxation laid upon a business is similar ie. 27%, then perhaps you can create a business of your own. Then sell yourself back to your current employer doing exactly the same stuff so that it has no impact what so ever to your employer's operation (*1).

As a business owner, you should deduct all costs incurred in order to perform your business (job) before you come up with a profit, which is then taxable. Lets say MYR 50,000 of your expenses can be qualified as business expenses. Then you may end up with paying less tax ie. MYR 13,500

$100,000 - $50,000 = $50,000 x 27% = $ 13,500

There are still MYR 23,000 expenses that are not classified as business expenses, hence you will end up with a remaining income of $13,500; instead of just $12,000 if you keep your 'job'.

$50,000 - $13,500 (tax) - $23,000 (non biz expenses) = $13,500

In this scenario simply by changing the 'mode' of how things work can save you a thousand or two. As you may have noticed, the difference is not that big. Hence, if you have been working whole your life; Annual income of MYR 100,000 is the magic number where you should start thinking if you want to continue working a job or start building something of your own.

This difference will become significant as your salary increases beyond MYR 100,000.

However, there are quite a handful of knowledge and skills you will need before you can make a switch like this successfully.

• setting and maintaining a business will cost money
• no employer means no one pays your EPF
• security, liability, risk and reward will have different meanings
• classifying business expenses is an important skill
• all business expenses should help the business grows
• pay yourself maximum non taxable salary, pay yourself EPF ...

In real and practical world, a smart guy doing this would NOT only save a thousand or two. But the actual tax saving should be 50%-80%, ie. from $15,000 to $3,500.

(*1) There WILL BE some impacts to the company especially account and human resource wise. In short, the company saves money by not paying you EPF and other cost to maintain an employee. Hence in practical world, one would ask for more than $100,000 when converting from an employment to a contract staff.

Most of you will think it is NOT possible to switch from an employment to a contractual staff without affecting the operation and yourself, only a few of you will start to think how to make that happen. Like wise, I can assure you that some has already made that switch successfully, although just a handful. But none of them were given any guideline or magic numbers like this article. So you are now equipped better than them. Hope you can get something out of this ...

Malaysia RM50 Credit Card fee waivers

It was mentioned before Malaysia's government initiative to charge RM50 tax on credit card to 'reduce' debt is a plain zany act. When confronted by many institutions and experts, Najib (some of his photos here) even goes public exercising his power to enforce his budget 2010.

Just in case you haven't heard, the time to pay this RM50 tax is the same as your annual fee due month. So if your cards are due in December 2010, you can hold it for another year before cancelling it out. But if your cards are due in Jan 2010, you better find out when the statement date is. You HAVE TO cancel your cards before the statement is generated. Once this RM50 tax is imposed, the banks will NOT be able to waive it for you even if you cancel your cards AFTER the statement is printed.

So far I only know UOB and EON banks will waive this RM50 tax for real.

You have to use your EON cards for 36 times to waive this RM50 tax. Normally you will have to use 24 times to waive its annual fee which is about RM150. So another 10 times more should be ok for those who really use the card.

UOB is one of the first banks to waive this tax in public. Varies options may be available but the one I know is just use RM300 and you will get back RM50 cash benefit to knock off this RM50 tax. UOB is also closely tighted to Robinson so if you shop there often, it could be the card to keep.

see ? The effect is already started .... you have to spend much more in order to save this RM 50 ...

All other cards who offer you RM50 rebate by using the points you have accumulated are just playing with your Finance IQ. It is a common practice that you get back a minimum of 0.2% rebate by using credit cards in this part of the world. The return may reach you either in the form of points accumulation or direct cash rebate on the bill. So giving you the option to 'waive' this RM50 tax with your points is the same like taking your money from your left pocket when you said you want to avoid taking out money from your right.

Do you know any other banks who will REALLY waive this RM50 tax ?

You can use this form to cancel your credit cards

click here to download as a pdf file.

Malaysian Personal Finance Part 1 - EPF

If you earn a salary in Malaysia, 8% of your salary goes to EPF (2009-2010) - Employee Provident Fund - before you can ever see it. This saving scheme is enforced by law and happened automatically, so this makes it a perfect ASS - Automated Saving System.

Your employer will add another 12% to it making it a total of 20% contribution. If your monthly salary is RM 2,500, RM 200 of your money goes to EPF. Your company adds another RM 300 to it so you will have a total of RM 500 in your EPF account.

Effectively you only receive RM 2,300 cash before tax. But the value you are receiving every month is actually RM 2,800 and not your salary amount RM 2,500. A 20% enforced ASS is absolutely NOT a bad thing at all especially during your mid life.

The lowest dividend EPF can declare is 2.5%, generally higher than most bank saving accounts for such a small amount of money. Again makes it a great ASS.

Sounds too good to be true ?

Indeed government force saving scheme like this is one of the greatest thing happen to one's personal finance. Most of the poverty in this country, not by chance, turn out to be those who didn't contribute to EPF.

Are everyone off the hook then ? Well, not exactly. If you have been following this site long enough, one of the fundamentals of ASS is in R E L A T I V E. Most of the people are in debt today, so if you are not in debt and have some saving, you are better than others. That is what ASS is all about. It is the Minimum one HAVE TO DO for his own personal finance. And one of the biggest effects of ASS is its psychological stop on getting into bad debt.

ASS does not make you rich, ASS does not fight inflation, it just give you a good start.

So if everyone has ONE ASS account and you have ONE ASS account then you are just like everyone else. Still in rat race that is. The status quo in the beginning of 21st century, is to create another ASS account yourself without the help of government enforcement. If you are able to setup an ASS account yourself consistently through out the years, you have just strengthen your personal finance from a merely 10% to above 60% !! . . . . . simply because most people fail to do so now.

If you have this 2nd ASS, you have increased your chances of success by 6x ! Because this 2nd ASS account will psychologically tune you into a secure investment in future. So a real personal finance starts at RM 2,300 in above example, not RM 2,500 or RM 2,800. EPF has already been setup and we should just forget all about it, our jobs starts at RM 2,300 !!

What's wrong with EPF then ? Well basically other than above generalization of EPF, everything else doesn't seem too right.

You cannot access the money until you are old, ie. age 55. So practically they are NOT your money. If you die early, it would just be a high premium low sum assured life insurance, paying out to your beneficiary.

In a good ASS, you are supposed to setup the saving system up and forget about it. Let it accumulate by itself over the time. But in real life, everyone is trying their best to get money out from EPF. Why do people need to withdraw from EPF prior to age 55 ? Because they do not have their own ASS accounts !

While it is really arguable if one should or should not withdraw from EPF, but the psychological effect of relying on EPF money is seriously damaging your ability to earn the income you could have been. If you want a house, you setup an ASS for the down payment. When you want a bigger house, focus all energy to increase your income. When your personal finance is setup right, a small increase in your income streams can have double effect in your finance world.

Last but not least, although government setup such provident fund at the name of people, the real intention of such fund management is really questionable. The real target of EPF is to fight inflation. There are some well known inflation hedgers such as stock markets and properties but EPF has less than 25% exposure on these 2 areas while more than 60% are channel back into govertmental mega projects. Generally speaking securities, bonds and loans pay out higher than Fix Deposit rate but still lower than inflation.

So generally we have a great system to start with in Malaysia, ASS is enforced using EPF. However, transparency and ability for EPF to function as it should, may take slightly longer to realize, if it happens at all. People's ability to use EPF in their favor, is still a long haul educational evolution.

Part 1 : EPF

Part 2 : Amanah Saham

PKFZ vs Buy A Car in Malaysia

One of the messages this site insists on spreading is that "Buying NEW car is the BIGGEST killer to a Malaysian Personal Finance". Today lets look at this at national level.

One of the hottest money topics in Malaysia now is PKFZ where RM 12 billions people's money has gone 'somewhere' that you and I have no business in. And we are going to compare that with the cars you and I bought some years ago, recently and even soon again.

641 out of 1,000 Malaysian own a car. Rank #3 in the world ( USA is #1 ofcourse ). Can you imagine a developing country aka NOT a Developed nation, rank #3 as the top car owners in the whole wide world !? If car ownership by land size is a benchmark, Malaysia would have already been a Super Nation !!

In Malaysia, when you pay RM 100,000 for a new car, RM 55,000 goes to the car. The rest of the 45% goes to 'somewhere' you and I have no business in. Below show some examples of different car prices in USA and Malaysia;

Hyundai Elantra costs about USD 12,000 in Lexington and MYR 96,000 in Kuala Lumpur

Honda Civic costs about USD 15,000 in Pittsburgh and MYR 113,000 in Malaysia

Toyota Camry costs about USD 20,000 in New York and MYR 150,000 in Malaysia

Use exchange rate USD 1 = MYR 3.5, you may get these numbers in comparison;

Car 1 : MYR 42,000 in USA vs MYR 96,000 in Malaysia ( overpay 56% )

Car 2 : MYR 52,000 in USA vs MYR 113,000 in Malaysia ( overpay 54% )

Car 3 : MYR 70,000 in USA vs MYR 150,000 in Malaysia ( overpay 53% )

Although most of the times you may find Malaysia car price is more than 2X the foreign car price, but some costs and fees are legitimate so trust me for now that only 45% has gone 'missing', not the 50+%.

Malaysia has a population of 25 millions people, that means there are 16 millions cars have been purchased. ( 25 millions/ 1,000 x 641 = 16 millions ).

Takes average car price at RM 50,000 ( actual figure is RM 68,XXX), then there are a total of RM 800,000 millions car sold. ( 50,000 x 16 million = 800,000 millions )

45% goes to 'somewhere' you and I have no business in, that is a total of RM 360,000 millions or RM 360 billions.

How much have we lost in PKFZ again ? RM 12 billions !

Game Over ! The result is :

RM 12 billions vs RM 360 billions

Yet everyone buy cars, made someone else rich and NO major news reporting this fundamental flaw. Ever heard of Slow Boil Frog's story ? Its happening right now right here everyday to everyone .... our daily lives ....

Lets make some sense out of this RM 360,000 millions.

16 millions of us own cars, so our car prices were to be normal all this while, Each and Everyone of us would actually get back MYR 22,500 ( 360,000 millions / 16 millions = 22,500 )

Most should know that Malaysia as a country earns money from Petroleum. In 2007, our export minus import net profit is MYR 129,000 millions. Still 50% less than all the money we 'contribute' by buying cars.

My friends always ask me why I wasn't shock when I heard the 12 billion PKFZ case. Well, I buy cars in Malaysia and that gives away 30X more than the PKFZ case ...

Other related topics

Car Loan rate is 1.9X Home Loan rate

How to manage your finance so that your FIRST car is FREE - in kclau's book

A few other ways to get FREE cars

Malaysia should have FREE market when it comes to cars

Buy used cars with cash, use house loan etc.

Finding best rates for car loan rate etc.

The Rights NOT to pay tax ?

This is a respond to Hafix's article and some readers' intrepretation on it

Hafiz is one of the columnists for Malaysia Insider and definitely one of the greatest writters you should read more if you are interested in Malaysia economy and politics.  Basically in his article, he mentioned that if the citizen loves the country more then everyone will be more willingly paying taxes.

While what the article says is true, but unfortunately it was read into a different kind of signal : "... we have the rights not to pay tax ... ".  A relatively destructive way to interpret the article, although Hafix may disagree.

Although what the article mentioned could be right on the disappointment we may have with the goverment.  But it doesn't give us any Rights NOT to pay taxes.  This example of doing evil upon the devil doesn't really work.

The fundamentals of life is still simple.  The story of goverment didn't do a good job and therefore you don't need to pay tax only lead to 2 practical ends;

1) You decide to leave this country.  Then yes, abuse it and forget about all the family and friends who stay back.  Don't pay any taxes.

2) You still want or need or have to stay and work here.  Then you should still pay your taxes.  As for the disappoinment from the goverment, you should continue to can them into doing better, fix them!  At the moment you stop paying tax, you would also lose your right to fix the goverment.

Complain all you want to release tension, but when it comes to real pratical life, we should still do the smart actions - the right thing as well.