TAXATION

1. State the purpose of taxation and describe each purpose.

(a) Source of government
revenue

(b) Government policy

implementation tool

(c) Control of sales of goods or

services

(d) Financial tool to stabilize

the economy

2. State the type of taxes and the authority that collect the taxes.

Description Type of taxes The authority

(a) The tax levied on the owner of land.
(b) The tax imposed on their income
earned by individual.
(c) The tax levied on the owner of
house.
(d) The tax levied on goods and
services.
(e) The tax levied on road user who
owns vehicle.

3. Describe the consequences of tax evasion from legal and financial aspect of each of the
following.
(a) Intentionally evade income tax or assist other person to evade income tax.

(b) Does not pay quit rent within the stated period in the notice of claim.

(c) Continually using a vehicle without valid road tax.

4. Calculate the chargeable income of each of the following.
(a) Annual income RM48 400
Tax exempted income RM2 160
Tax exemption RM1 320
Tax relief RM5 500

(b)
Annual income RM65 400
Tax exempted income RM4 320
Tax exemption RM3 000
Tax relief RM21 300

(c)
Annual income RM78 700
Tax exempted allowances RM5 900
Tax exemption RM1 000
Tax relief RM10 300

(d)
Annual income RM60 400
Donation to welfare organisation RM900
Tax relief RM13 800

(e) Fatin’s annual income is RM81 500, inclusive of RM12 200 bonus. She donated
RM1 600 to a government-approved welfare centre. It is given that the total
claimable tax relief is RM15 400.
 (f) Encik Zaki had annual income of RM102 000. RM8 500 of his annual income is
exemted. He donated RM1 500 and RM2 500 to a library and a government approved
charity organization respectively. Encik Zaki’s total tax relief is RM24 350. Calculate
Encik Zaki’s chargeable income.

(g) Mrs Ng’s total annual income was RM86 500. 20% of her income is tax exempted.
She donated RM1 000 to a government-approved orphanage and her total tax relief
is RM18 500. Calculate Mrs Ng’s chargeable income.

5. Mr Lim’s annual income in 2020 was RM76 650. RM10 500 of his income is a tax
exempted allowance. Total tax relief claimed by his was RM33 184.

(a) Determine whether Mr Lim was eligible for a tax rebate of RM400.

(b) Calculate the income tax payable by Mr. Lim

6. The table shows the summary of Nadya’s self-assessment in 2020.

Detail Amount (RM)

Annual income 68 750
Zakat 520
Tax relief:
Individual 9 000
Lifestyle 2 500
Medical insurance 2 400
EPF 4 000

Calculate the income tax payable by Nadya.

7. Cik Sharifah is an assistant manager who works in Jaya Group Sdn Bhd. She is doing a
master course in Open University during weekends. Cik Sharifah is preparing to file her
tax for the assessment year of 2020. The table below shows the tax filing information for
Cik Sharifah.

Items Amount (RM)

Total annual income 54 000
Self and dependent 9 000
Education fee (limited to RM7 000) 3 000
Lifestyle (limited to RM2 500) 2 800
EPF & Life insurance (limited to RM7 000 ) 6 000

(a) Calculate the chargeable income for Cik Sharifah.

 (b) Calculate the income tax payable by Cik Sharifah.

(c) Let say Cik Sharifah has made a Zakat contribution of RM560. Calculate the total
tax payable for the assessment year of 2020.

(d) To obtain tax deductions, Cik Sharifah has increased the total amount for her and
her family’s dependents. What are the acts and penalties imposed on her if she is
found to be cheating in assessing taxes?

8. Zul had a chargeable income of RM82 800 in 2020 and his zakat payment was RM550.
His monthly tax deduction is RM497 per month.
(a) Calculate the income tax payable by Zul for that year.

(b) State Zul’s further action after making self-assessment.

 (c) What is the effect if Zul does not pay his tax intentionally?

9. The table shows the summary of Alex’s self-assessment in 2020.

Detail Amount (RM)

Annual income 98 500
Donation 400
Tax relief 37 900

The total monthly tax deduction of Alex in 2020 was RM6 409. How much will be
refunded by IRB to Alex account?

10. Determine whether the following monthly tax deduction (PCB) situation has an
insufficient tax payment or excess deduction. Hence, calculate the amount.
(a)
Items Amount (RM)
Total annual income 72 000
PCB 170
Donate to welfare centre 1 500
Zakat 380
Individual 9 000
Parents 2 200
Lifestyle (limited to RM2 500) 1 800
EPF & Life insurance (limited to RM7 000 ) 4 000
Perkeso 250
(b)
Items Amount (RM)
Annual income 60 600
PCB 10
Individual 9 000
Mother’s treatment 3 500
Lifestyle (limited to RM2 500) 2 500
Kindergarten fees 1 000
Wife 4 000
Child 2 000
EPF & Life insurance (limited to RM7 000) 5 300
Perkeso 250
11. Table shows the annual income, donation and tax reliefs of Mr Yong and his wife in 2020.

Items Mr Yong Mrs Yong

Annual income RM84 660 RM53 520
Donation RM1 500 RM800
Tax relief
Individual RM9 000 RM9 000
Parent (limited to RM3 000) RM3 000 RM0
Lifestyle (limited to RM2 500) RM1 570 RM2 400
Medical insurance (limited to RM3 000) RM2 000 RM1 800
EPF & Life insurance (limited to RM7 000) RM7 000 RM7 000

(a) Calculate the total income tax of Mr Yong and his wife by using joint tax
assessment and separate tax assessment.
Joint tax Separate tax assessment
Detail
assessment
Husband & wife Mr Yong Mrs Yong

(b) State the more appropriate tax assessment method for Mr Yong and his wife.
Explain your answer.
12. Mr Jefri and his wife earn annual income of RM62 200 and RM45 030 respectively. The
table below shows the tax relief to be claimed by them.

Items Mr Jefri Wife

Individual RM9 000 RM9 000
EPF (limited to RM7 000) RM6 200 RM4 000
Medical insurance (limited to RM3 000) RM3 100 RM1 800

Calculate total income tax of Mr Jefri and his wife if they use separate assessment.
Detail Separate tax assessment
Mr Jefri Wife

13. The table below shows the tax relief to be claimed by Encik Ali and his wife.

Items Encik Ali Wife

Individual RM9 000 RM9 000
EPF (limited to RM7 000) RM5 700 RM5 400
Lifestyle (limited to RM2 500) RM2 650 RM200
Medical insurance (limited to RM3 000) RM2 000 RM1 600

It is given that the annual income of Encik Ali and his wife are RM53 200 and RM 51 080
respectively. Calculate total income tax of Encik Ali and his wife if they use separate
assessment.
 Detail Separate tax assessment
Encik Ali Wife

14. Table shows the information on salaries of En. Ezani and his wife, Pn. Alia.

Items En. Ezani Pn. Alia

Annual income RM58 600 RM48 000
Approved donation RM800 RM1 200
Zakat RM230 RM65
Tax relief
Individual RM9 000 RM9 000
Lifestyle (limited to RM2 500) RM2 700 RM2 500
Parents (limited to RM3 000) RM4 000 RM1 800
EPF and insurance (limited to RM7 000) RM3 000 RM3 000

Calculate the income tax of En. Ezani and his wife by using joint tax assessment and
separate tax assessment. Hence, determine which assessment is more suitable.
 Joint tax Separate tax assessment
Detail
assessment
Husband & wife En. Ezani Pn. Alia

15. Table shows the road tax rates for private motorcycle and car in Sabah and Sarawak.

Engine capacity Road tax rate

Type of vehicle
(cc) Base rate Progressive rate
Motorcycle 201 - 250 RM12 -
Car 1 601 – 1 800 RM160 + RM0.32 each cc exceeding 1 600 cc

Aleeza owns a private motorcycle with engine capacity of 249 cc and a private car with
engine capacity of 1 799 cc in Sarawak. Calculate the total road tax to pay for each
vehicle.
16. Rajan owns two private cars with engine capacity of 1 496 cc and 1 998 cc in Pahang.
Calculate the difference in road tax Rajan has to pay for each car.

17. Calculate road tax of each of the following motorcycles based on the given road tax rates.

Engine capacity (cc) Rates in Peninsular Malaysia Rates in Sabah and Sarawak
≤ 150 RM2.00 RM2.00
151 – 200 RM30.00 RM9.00
201 – 250n RM50.00 RM12.00
251 – 500 RM180.00 RM30.00
501 – 800 RM250.00 RM40.00
Exceeding 800 RM350.00 RM42.00

(a) Engine capacity: 700 cc (c) Engine capacity: 1 200 cc

Area: Johor Area: Selangor

(b) Engine capacity: 420 cc (d) Engine capacity: 1 080 cc

Area: Sarawak Area: Sabah

18. Calculate road tax of each of the following cars based on the given road tax rates.
Peninsular Malaysia Sabah & Sarawak
Capacity
Base rate Progressive rate Base rate Progressive rate
≤ 1 000 RM20 - RM20 -
1 001 – 1 200 RM55 - RM44 -
1 201 – 1 400 RM70 - RM56 -
1 400 – 1 600 RM90 - RM72 -
RM0.40 each cc RM0.32 each cc
1 601 – 1 800 RM200 RM160
exceeding 1 600 exceeding 1 600
RM0.50 each cc RM0.25 each cc
1 801 – 2 000 RM280 RM224
exceeding 1 800 exceeding 1 800
 (a) Engine capacity: 1 750 cc (c) Engine capacity: 1 570 cc
Area: Melaka Area: Negeri Sembilan

(b) Engine capacity: 1 825 cc (d) Engine capacity: 1 950 cc

Area: Sarawak Area: Perak

19. Answer each of the following questions.

(a) Mr Lee owns a house in Mutiara (c)
Damansara. The annual value of Mr
Lee’s house is RM17 400 and the
property assessment tax rate set by the
Petaling Jaya City Council is 8.8%.
Mr Lee pays his property assessment
tax every half-year. Calculate the
property assessment tax paid by Mr
Lee.
The estimation of rental of Puan
Norlin’s house is RM950 per month.
The property assessment tax rate of
her house is 4%. Calculate the
property assessment tax paid by Pn.
Norlin each year.

(b) Annual value of En. Alif’s house is (d)
RM15 000 in 2020. The property
assessment tax rate for that year is 5%.
En. Alif receives property assessment
tax bill for half a year. Calculate the
property assessment tax to be paid by
En. Alif.
Janet owns a single-storey house. It is
given that the property assessment
rate is 8.5% and the annual value of
the house is RM4 200. Calculate the
property assessment tax paid for a
year.

20. Calculate the quit rent of each of the following.

Land area Quit rent rate per unit area Quit rent per year
150 m2 RM0.50 m2
230 m2 RM0.22 m2
305 m2 RM1.44 m2
21. Calculate the sales and service tax for each of the following.
(a) Doreen ordered 3 plates of fried rice from a restaurant. It is given that the price of a
plate of fried rice is RM6 and the restaurant imposes 6% service tax. Calculate the
service tax payable by Doreen.

(b) Wahid spent RM90 for his phone calls on January. It is given that the service tax
imposed is 6%. Calculate the service tax payable by Wahid.

(c) The diagram shows Deeja’s purchasing receipt in a restaurant.

Restoran Bamboo
Invoice
06/03/2020 02.15 pm B123456
Qty Description Price Amount
1 Pasta 18.80 18.80
3 Mushroom soup 5.50 16.50
1 Salmon grill 24.50 24.50
1 Chicken chop 21.60 21.60
2 Cappucino 9.40 18.80
3 Coffe 4.80 14.40
Subtotal before tax RM
Service tax 6% RM
Round adjusment RM
Total RM

(i) Calculate the service tax levied.

(ii) What is the total amount needs to be paid by Deeja?

22. The chargeable income of Laila in 2020 was RM34 090. It is given that she paid RM100
for zakat in the same year.
(a) What is the total tax rebate for Laila?

(b) Calculate income tax payable by Laila.

23. Hanan annual income was RM46 000, including bonus. She donated RM500 to a welfare
centre approved by government. She declared tax relief of RM12 330 in the same year.
(a) Calculate Hanan’s chargeable income.

(b) Is Hanan eligible for tax rebate? Explain your answer.

(c) Calculate income tax payable by Hanan?