BKAT2013 PRINCIPLES OF TAXATION (A201)

PROBLEM-BASED LEARNING PROJECT

(GROUP WORK)

PREPARED BY:

Assoc. Prof. Dr. Noraza Mat Udin

Dr. Saidatul Nurul Hidayah Jannatun Naim Bt Nor Ahmad
Assoc. Prof. Dr. Zaimah Zainol Ariffin

January 2021
INFORMATION

Tax Agent details:

Name Loyal Tax Services
Address 36, Jalan Sembarang, Taiping
Postcode 34000
Telephone 605-8417341
Mobile No. 012-6990104
Fax No. 605-8766234
Tax Agent Reference No. / Audit License 2003/15/12K
Company Registration 321576-RT
E-mail tax@loyal.com
Web site loyaltax.com

Individual 1:
Name Amran Bin Maran (Malaysian)
IC No. 680101-05-2323 (New) / A3370887 (Old)
Tax Reference No OG 67542312-12
Correspondence/Residence Address 77 Taman Bersatu Hati, Jalan Hati-Hati,
34000 Taiping, Perak
Business Name & Address WeSenD Enterprise
23, Jalan Taman, 34000 Taiping, Perak
Mobile Phone No. 011-6753422
Home Phone No. 605-8234532
Business Tel. & Fax No. 605-8792398
E-mel amran@loyaltax.com
Bank Name CCBC Bank Berhad
Bank Account Number 01-7823677-23
Bank Address 3, Jalan Serba Ada, 34000 Taiping, Perak

Individual 2:

Name Salina Ahmad

IC No. 680313-07-5224 (New) / A8723416 (Old)
Tax Reference No. SG 12345678-08(0)
Residence/Correspondenc 77 Taman Bersatu Hati, Jalan Hati-Hati, 34000 Taiping, Perak
e Address
Mobile Phone No. 019-6444342
Home Phone No. 605-8234532
E-mel salina@gmail.com
Bank Name CCBC Bank Berhad
Bank Account Number 05-7689342-11
Bank address 3, Jalan Serba Ada, 34000 Taiping, Perak

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Individual 3:

Name Zati bt Salim

IC No. 750217-02-5678
Tax Reference No. OG 12459823-23
Correspondence/ 19, Jalan Selamat, 34000 Taiping, Perak
Residence Address
Mobile Phone No. 012-4123123
Home Phone No. 605-8843128
Bank Name Perwira Bank Berhad
Bank Account Number 78-768234-21
Bank address 1, Jalan Bahu, 34000 Taiping, Perak

Individual 4:

Name Damia bt Azam

IC No. 751122-02-3875
Tax Reference No. OG 59823356-43
Correspondence/ 789, Taman Selayang, Jalan Selayang 2, 34000 Taiping, Perak
Residence Address
Mobile Phone No. 012-2349087
Home Phone No. 605-8234167
Bank Name Perwira Bank Berhad
Bank Account Number 78-345678-66
Bank address 1, Jalan Bahu, 34000 Taiping, Perak

Individual 5:

Name Yahya bt Akhir

IC No. 750607-02-6723
Tax Reference No. OG 67892321-34
Correspondence/ 23, Taman Selayang, Jalan Selayang 8, 34000 Taiping, Perak
Residence Address
Mobile Phone No. 012-5098287
Home Phone No. 605-8518651
Bank Name Perwira Bank Berhad
Bank Account Number 78-123456-44
Bank address 1, Jalan Bahu, 34000 Taiping, Perak

Partnership business

Business Name & Address ZYD Lite & Easy Café

78, Kompleks Utama, Jalan Satu, 34000 Taiping, Perak

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Amran is the owner of WeSenD Enterprise which provides domestic and international
shipping services since 2016. Below is the income statement for the year ended 31 December
2020:

WeSenD Enterprise
Income Statement for the Year Ended 31 December 2020
Notes RM RM
Sales 1,420,000
Less: Operating Expenses
Remuneration 1 312,000
EPF 65,520
Rental 2 72,000
Utilities 16,000
Entertainment 3 7,000
General provision for bad debt 3,000
Donations to approved COVID-19
Pandemic Fund 10,000
Fines for traffic offences 2,500
Repair and maintenance (vehicles) 200,000
Loan repayment (business) 4 8,000
Business licence (renewal) 1,800
Training (employees) 6,000 (703,820)
Net income 716,180

Notes to the account:

1. Remuneration comprises: RM
Malik’s salary 60,000
Malik travelling allowance 12,000
Employees’ salary 240,000
2. Included rental of Zati’s house 24,000
3. Entertainment expenses comprise of:
free trip as an incentive to sales agent for achieving the sales
target 5,000
Gift without business logo for customer 2,000

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 4. The payment includes an annual interest of five percent.

WeSenD Enterprise reported capital allowance and balancing charge for current year
amounted to RM57,200 and RM6,700 respectively.

On 23 March 1996, Amran married Salina who is a teacher in a secondary school in Taiping,
Perak. They have three (3) children named Melati, Yusuf and Delima. Salina received
monthly salary of RM11,000 including allowances of RM1,500. Salina has her step mother
staying with her and Amran. Her father and mother had passed away.
Amran met Zati, a regular customer, when she came to complain about her lost parcel on 1
May 2015. Five months later, they married and Zati gave birth to Nana and Harun in 2018
and 2020 respectively. Zati is a lecturer in a private college and she is also a partner in ZYD
Lite & Easy Café together with Yahya and Damia, her school friends. They operated the café
since early 2018. Yahya is the main partner who runs the partnership business operation.
Damia is a famous writer since she left her job in a publishing company. She writes actively
in various medium including social media.
Zati received RM8,650 monthly after 11% of employee provident fund deduction from her
employer while Damia earned royalty payments from various sources as follows:
e-book publication RM25,000
novels RM65,000
translation work RM30,000 (received from Dewan Bahasa dan Pustaka
Malaysia)

Damia suffered from leukaemia since 2019 and currently on regular check-up in a private
hospital. On 15 February 2020, Amran involved in a serious accident when he was on the
way home from Kuala Lumpur and passed away after a week. Zati received compensation of
RM100,000 from a local insurance company for Takaful policy that she subscribed for
Amran and herself.
In September 2020, Zati married Yahya. On 25 Disember 2020, she prepared a surprise
dinner to inform Yahya that she is pregnant. Prior to joining the partnership, Yahya divorced
Normi who he married in June 2010. Normi moved out with their four children. They agreed
that Normi will take care of the children and claim all tax reliefs.
The divisible income of ZYD Lite & Easy Café in year 2020 was RM150,534.

The following information is related to expenses paid in year 2020 (all original receipts and
supporting documents are kept systematically):
1. Zati took care of her parents together with her sister. The partnership paid RM1,300
for her mother’s medical expenses. Amran spent RM1,000 each for medical expenses
of his mothers in-law.

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2. Damia paid RM19,000 for her medical treatment including complete medical
examination. Half of the bill was settled by the partnership.

3. Salina purchased a smartphone worth RM1,100 for Melati. She also paid monthly
internet usage of RM80 and RM120 for herself and children which was subscribed
under her name.

4. In total, Amran spent RM1,320 for internet usage subscription under his name and
RM1,180 for books purchased by his children in year 2020.

5. Salina purchased a wheel chair for her step mother. She could not walk much due to
old age.

7. Information related to children is as follows:

Melati Aged 24 years old and married on 1 November 2020.

Yusuf Aged 20 years old, taking Bachelor’s degree (part time) at a public
university in Malaysia.

Delima Aged 18 years old, studying at a Polytechnic in Kedah.

8. Zati and Yahya deposited RM6,000 and RM8,900 respectively in their children’s
SSPN accounts. Yahya withdrew RM2,000 to fund her children’s education needs.

9. Insurance policies:

Salina paid RM500 for life insurance premium at the end of every month. The policy
was subscribed under her name. She also paid RM450 for monthly medical insurance
premium for herself. Zati paid RM600 for life insurance premium under her name
together with Amran and Salina. As for the children, Zati subscribed medical and
education insurance policy for Delima, Nana and Harun with monthly premium of
RM100 each.

Damia and Yahya spent RM500 monthly for their life insurance premium while
Yahya also paid in total RM350 monthly for his children’s medical insurance
policies. Yahya’s premiums was paid by the partnership.

10. Amran, Salina and Zati paid zakah for RM10,000, RM8,000 and RM6,000
respectively. The monthly tax deduction (MTD) for Salina and Zati was RM400 each
while Amran also paid instalment tax payment amounted to RM12,000.

11. Due to the Covid-19 Pandemic which impacted the operations of the café, the
partners agreed that only Yahya was paid monthly salary of RM2000 by the
partnership. Other regular payments such as profit on capital contribution and bonus
to partners were ceased temporarily.

REQUIRED:

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Using Microsoft excel, prepare and submit relevant tax return form (TRF) for the above
individuals for year of assessment 2020. You have to decide on the suitable TRF and type of
assessment to submit. Please ensure that the tax payment is at the minimum. You may use
TRF for year of assessment 2019 format.

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B. Reflection

In the light of Covid-19 Pandemic, (a) explain the incentives available for individual
taxpayers under Budget 2021 that would lessen the burden of the citizens, and (b) assuming
that we manage to overcome the pandemic, if you are given the chance to be the policymaker
for Malaysian government, propose and explain how would you reform the Malaysian tax
regime to balance between both economic development during post Covid-19 as well as
ensuring the wellbeing of the people.

Please present your answer in a report of about 7-10 pages (using Times New Roman, 12-font
size, double-spacing) excluding reference list.

END OF QUESTIONS