Inflation and Tax

Inflation
• Inflation is a measure of the rate of rising
prices of goods and services in an economy.
Inflation can occur when prices rise due to
increases in production costs, such as raw
materials and wages. A surge in demand for
products and services can cause inflation as
consumers are willing to pay more for the
product.
 Inflation rate
• The inflation rate is the percentage increase
or decrease in prices during a specified period,
usually a month or a year. The percentage tells
you how quickly prices rose during the period.
For example, if the inflation rate for a gallon of
gas is 2% per year, then gas prices will be 2%
higher next year.
• Inflation is the decline of purchasing power of
a given currency over time. A quantitative
estimate of the rate at which the decline in
purchasing power occurs can be reflected in
the increase of an average price level of a
basket of selected goods and services in an
economy over some period of time.
• Inflation allows borrowers to pay lenders back
with money that is worth less than it was
when it was originally borrowed,
which benefits borrowers.
When inflation causes higher prices, the
demand for credit increases,
which benefits lenders.
• Lenders are hurt by
unanticipated inflation because the money
they get paid back has less purchasing power
than the money they loaned out. Borrowers
benefit from unanticipated inflation because
the money they pay back is worth less than
the money they borrowed.
 Tax
Tax Rate. The Malaysian tax system is territorial.
Residents and non-residents alike are taxed on
their Malaysian-sourced income while
foreign-sourced income is usually not taxed
even in the case of resident and/or local firms.
Non-resident companies are taxed at a 24%
flat-rate, regardless of their capital.
• Learn about 12 specific taxes, four within each
main category—earn: individual income taxes,
corporate income taxes, payroll taxes,
and capital gains taxes; buy: sales taxes, gross
receipts taxes, value-added taxes, and excise
taxes; and own: property taxes, tangible
personal property taxes, estate and
inheritance .
• Here are the income tax rates for
personal income tax in Malaysia for YA 2019.
For example, let's say your annual
taxable income is RM48,000. Based on this
amount, the income tax to pay the
government is RM1,640 (at a rate of 8%). ...
Chargeable income is your
taxable income minus any tax deductions
and tax relief
• An individual who earns an annual
employment income of RM25,501 (after EPF
deduction) has to register a tax file. With
effect year 2010 an individual who earns an
annual employment income of RM26,501
(after EPF deduction) has to register a tax file