For salaried employees, I had compiled lists of tax-exempt income and additional deductions that can be claimed for income tax calculations. I shall put up a checklist pretty soon.

Please see my postings in www.mytaxation.blogspot.com.my

Hope it helps.

I will put up writings for businesses if I can find the time.

Please note that rebate is RM350 for 2008 and RM400 is only effective for 2009 income.

GST is a type of 'Consumption Tax' whereas "Income Tax' is a tax on 'Income'.

The bad thing about income tax is that it does not encourage savings. As long as you make a certain amount of income, you have to pay a certain amount of tax, regardless of whether you spend them or not.

Consumption Tax, on the other hand, encourages savings in a way that you only pay the tax when you spend. If you do not spend, then you are not taxed. We already have some consumption tax in Malaysia, eg. hotels, high-end restaurants, parking, gambling, etc. You pay mainly 5% tax when you use these services. If you don't use, then you don't pay. It's fair, right ?

The good thing about consumption tax is based on the fact that the rich usually spend more, then they are taxed more, compared to the poor.

In countries that has GST, the income tax rate will have to be low to balance it out. You cannot have a high tax on income and then tax again when people spend, that will be bad for the people.

Yes you are right. It also depends on how low the government will lower the income tax rates. They need to find a good balance between Income Tax rate and the GST rate.

It is best that you check with your insurance agent. Your insurance may comprise life and other types of insurance. Only life, medical and educational insurances are entitled to relief.

There are 2 school of thoughts as far as taxability of such incomes is concerned. I am of the opinion that these income are not taxable. However, if you do a google on this subject, you will find that there are people who say that they are taxable.

My reasons are explained in my blog www.mytaxation.blogspot.com. Look under the posting "Is income from Google Adsense Taxable ?"

You are entitled to rely on whichever opinion you think is right.

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Added on April 11, 2009, 10:08 pmNot all Malaysian insurance products are tax deductible.

The Income Tax Act provides that only insurance premiums paid on life insurance, medical and education insurance are tax deductible.

It does not even say that the insurance companies must be Malaysian companies. Therefore, even insurance premiums paid to foreign insurance companies are deductible, as long as they are for insurance policies mentioned above.

This post has been edited by gtchye: Apr 11 2009, 10:08 PM

For your information, the IRB allows companies who have difficulties to calculate the tax-exempt income (Item G of the EA Form) to use the old formst of Form EA (without Item G). These companies are required to submit to the IRB the details of Item G by 30 May 2009. Since it does not affect the employees' tax, this information need not be disclosed to the employees.

Therefore, some companies use the new format while some companies use the old ones.