Tax relief for year of assessment 2021: 10 tax changes taxpayers should know / Ida Haryanti Mohd Noor

Tax is an imposition of compulsory contribution on individuals or corporations by government entities in order to raise revenue for various government expenditures such as to build and maintain public infrastructures used in the country and is used as an instrument of fiscal policy. Tax can be categorized into two types which are direct tax and indirect tax. Direct tax is paid directly by individuals or corporations to the imposing entities such as income tax and real property gain tax while indirect tax is a tax on consumption of goods and services such as sales tax and entertainment duties. In Malaysia, administration of direct tax is under the responsibilities of the Inland Revenue Board. Self-assessment system has been introduced in Malaysia since the year of assessment 2001 while for individuals (employees, sole proprietors and partners in a partnership), self-assessment system was imposed since the year of assessment 2004. Self-assessment system is a tax system whereby taxpayers are responsible to compute their own chargeable income and income tax liability as well as paying the correct amount of tax within the stipulated date.