Income taxes were introduced at various time and for various

purpose in the preceding 30 years.

In 1947, R.B.Heasman (Special Income Tax Adviser to the

Governments of Malaya and Singapore

The Straits Settlements comprised Singapore, Malacca, Penang

with such as hostile reception characterized subsequent attempts
(1920,1941-1945)

in 1917 on a temporary basis in Malaya (as it was then known until 1963),
was clouded with uncertainty as it faced strong opposition a tax from the
general public (Subramaniam, 1979).

The upsurge in rubber production after 1900 and tax imposed

on rubber exports in 1907

HISTORY AND BACKGROUND

Type of taxes - direct taxation & indirect taxation

Indirect taxation was the sources of revenue depended

heavily by Malaysia

Taxation included excise and import duties, and land taxes

1910 was withdrawn the following year as it did not receive the
support of the tax-paying public was introduced by the Straits
Settlements Legislative Council

Introduce an income tax system until the introduction of

income tax in its modern form in 1948.

The Straits Settlements prior to 1948 were interrupted by the

two world wars.

was originally the Income Tax Ordinance 1947 before

repealed and replaced by the Income Tax Act 1967
INCOME TAX ACT 1967

came into effect on 1 January 1968

unfavourable reception of the 1910 draft bill
concealment of proposals to introduce income tax

Income Tax Ordinance 1947 (Peninsular Malaysia) 1917 - 1922

War Tax Ordinance was introduced and remained in force up
consolidated three laws of income taxation then existing in to the year 1919
Sabah Income Tax Ordinance 1956 (Sabah) Malaysia

Sarawak Inland Revenue Ordinance 1960 (Sarawak)

1920 - conversion of War Tax Ordinance into the Income Tax
this three separate taxation systems continued in existence until Ordinance 1920 (effective from 1 January 1920)
the introduction of ITA 1967

1922 - the taxpayers opposed the Ordinance because rather

than to advance the war efforts of the Imperial Government,
the revenue was used to meet local expenditure

result - premature repeal of the Ordinance

taxability of income was covered under sec 31 ITO

INCOME TAX ORDINANCE 1947 1923 - 1940

based on Model Colonial Territories Income Tax Ordinance
1922 (UK) which was designed for the British colonies HISTORY TAXATION 1919-1967 no income tax in the Straits Settlements

tax laws of Commonwealth countries were initially based on

this model legislation 1941 - a tax on profit and income was reimposed in the
Straits Settlements
1941 - 1945
Ordinance wa renewed year futher attempts to collect taxes
during were forestalled by The Japanese Occupation of
Malaya

Collection taxes during the Japanese Occupation from 1942

until 1945 was not well documented (Subramaniam 1979)

Estimated the dolar sign was used between $70,000 and

$80,000 worth of assessments were made and collecting the
the Special Income Tax Adviser to the Governments of japanese occupation period (Chin Kee On, 1976)
Malaya and Singapore

1946 - Heasman was appointed to draft a tax legislation for

Malaya
POST 1945

1947 - Heasman completed a comprehensive report

1 January 1948 - the Income Tax Ordinance 1947 took effect
(beginning of new era of income taxation on a permanent
basis in Malaya since 38 years after the proposal was first
mentioned in the Straits Settlements)