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The 'zakat' option

Hazlin Hassan says Malaysian tax payers are asking why they should pay when it will be misused.

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Published on May 6th, 2009
 

IN KUALA LUMPUR

THAT TIME of the year has just passed again. The time to hand over a chunk of your salary to the Inland Revenue Board with a heavy heart.

For employees, the deadline was April 30. But for businesses, the self-employed and other independent contractors, they still have until the end  of June.

Many Malaysians, or at least law-abiding tax-paying ones, were shocked to learn recently that at least 900,000 Malaysians are guilty of not paying their taxes.

There were an estimated 2 million people with taxable earnings in the country, but only 1.1 million are currently paying, Deputy Finance Minister Kong Cho Ha told parliament in late March.

He said the IRB was carrying out stricter audits on workers and companies to track down these tax dodgers.

Last year, the country's tax collection reached a record high of RM 90.792 billion, reports said.

But with huge annual income taxes in Malaysia, perhaps it's not surprising that so many try to avoid paying, even if it means risking fines and being barred from travelling overseas.

And many Malaysians do not even qualify to pay taxes. Those earning less than RM2,500 are not taxable, which probably forms the bulk of Malaysian workers.

But back to the tax evaders.

Rightly or wrongly, some people do not like paying their taxes because they feel their tax dollars will be misused by politicians.

Scandals alleging misuse of public funds are aplenty in Malaysia.

This week, the audit report will be out on a white elephant project, the Port Klang Free Zone, which has swallowed billions of ringgit worth of tax monies.

The news is sure to spark anger among the public. The government is due to reveal the audit report on the matter very soon.

Recently, allegations emerged that a politician had squandered public funds to take his family and maid on a first-class holiday to almost every Disneyland theme park in the world, barely-disguised as working trips.

Reports claimed that he blew RM1.7 million on these supposed work trips between 2004 and 2007.

When news of this broke, there was widespread anger expressed by ordinary Malaysians. It was hotly debated on the Internet.

Hafiz Noor Shams, columnist at the influential Malaysian Insider news website wrote a long piece questioning "Why Should We Pay Income Tax To BN?"

He appeared to suggest that Malaysian tax dodgers did so probably because they did not trust the Barisan Nasional-led government.

"Corruption is seen as rampant. Observe the Auditor-General reports highlighting multiple suspicious dealings, which include screwdrivers bought for hundreds of ringgit. Has any action been taken to allay such suspicion? Have any culprits been taken to task? The answer is a resounding no," he wrote.

He goes on to list further examples, including Umno politicians convicted of corruption within their own party but yet still allowed to contest top posts and remain in power.

"So, given the corruption, the abuse of power and disrespect for individual rights, why should taxes be paid by many who are not aligned with the policy of BN?"

I personally know people who, after obediently filing their taxes in April each year, methodically work out the amount of taxes they have to pay for the current year, and pay it in Islamic tithes, widely known as zakat here, instead, so as to avoid paying the government the said amount come next April.

Muslims are already obliged under Islam, to pay tithes annually, depending on how much they can afford to pay.

And in Malaysia, Muslims have the option to deduct their tithe payments, with official receipts from the recognised religious bodies of course, against their total taxes due.

So if you were to owe the government RM3,000 in taxes for example, and worked it out earlier, you then pay RM3,000 in tithes to avoid topping up what to some is "the Barisan Nasional's coffers", rightly or wrongly.

These people feel it would be more honestly spent by the religious authorities instead of the government, as only certain strict categories of people are entitled to receive zakat, including the poor and needy.

Most Malaysians I know do seem weary of paying their taxes like the good citizens they are, and then having to stomach the money scandals that seem to keep cropping up.

"I wish I had a zakat option too!" said one of my non-Muslim friends.

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