Public ruling 1/2006: Additional tax liability for the employed

The Government is operating under a deficit budget for many years. The Economic Planning Unit is working hard to find ways to finance the 9th Malaysian Plan. The Royal Malaysian Police is launching the Ops Saman to collect traffic summons. The IRB Department, in the other hand, scratches their heads to collect more revenue from the taxpayers.

One of the legitimate ways is through the Public Ruling issued by the IRB.

I found out that I have higher tax liability in year 2006. Public Ruling 1/2006 has effectively increases the tax liability for the employed.

There are new categories of tax liability, inter alia,
1. Annual insurance premium paid by the employer will become part of the gross income from employment and therefore taxable.

2. A gift for service award is taxable. A watch costing RM XYZ for serving the company for 20 years is taxable.