The current tax system is unfair to the middle class and lower income group. Do you agree ?

Yes, the current tax system is unfair to the middle class group and the lower income group. One of the critical issues here is for the government to re-look at the unfair tax system of personal income tax and to restructure the whole tax revenue collection thus, that no single group is being penalized while government is finding ways to equilibrium the nation’s income and expenditure as a result of oil subsidy removal. The Malaysian population can be decided into three income group, high medium low. The middle income group in the worst to be hit by recent oil price hike, because they utilize their own personal vehicle as their main transportation. However, high income group will not be affected by inflation, because they possess a strong financial freedom. Besides, the low income group will be protected by government due to the fact that low income group generally utilize public transport. While Malaysia is at this time go through a lot of political turmoil, undermining and bickering, we expectation the government is still working hard to solve the critical economic issues confronted by the nation. While we acknowledged that some of these economic issues such as the acute inflation led by oil price hike is due to a global phenomenon, we still believe that there is a lot our government could do to help relieve our pain, particularly due to the fact that we are a net oil exporting country.

(Written by Ong Chee Way)

We argued that a tax like the Good and Services Tax (GST) has a more effect on lower and middle income earners, which mean that the tax consumes a higher proportion of their income, compared to those earning large incomes. In this case, it shows unfair to these particular income group earners. As we know, some products have no GST, if there is a selective consumption of goods and food, one may be able to avoid GST. In this case, some traders had transferred the additional cost due to GST to the customers and eventually the public faced the problem of inflation. And lastly, it will lead to the increasing of living costs and it was impossible to avoid GST as well.

Before the GST implemented, our taxation system collected taxes only from 25 % of the population while another 75 % of the citizens only paid for service charge. With the implementation of GST, none of a citizen can be escape from GST. Thus, the impact of GST on the low and middle income earners especially to those who had no financial ability and still depending on study loans such as PTPTN or family finance would affect the monthly expenses. Other than that, the some of the students pointed out that the hostel authority prevented them from using additional electrical appliances and cooking in the hostel. From this situation, we can see that high taxes can actually cause a burden for most of the citizens. Besides that, the cost of expenditure at the school canteen was high and it would further burden the students.

In addition, taxation has the high potential to decrease consumer spending. It is because, taxes take money away from consumers and reduce disposable income. How can a lower income consumer spending decrease just because of the high taxes proposed in the country? In our opinion, high taxes may affect economic growth. Not only that, the government sometimes institutes tax cuts during periods of economic hardship as to encourage spending and growth. Besides that, other than high income earner, there are many lower and middle income earners tend to migrate to other country for works due to the unaffordable high tax in Malaysia. Once they have migrated to other countries for works, for instance, Australia and London, the local country might also face with the problem of unemployment. Unemployment is a serious issues for a particular country as it may lead to inflation.

(Written by Yeoh Hui Wen)

Meanwhile, Income tax refers to the taxes which are Annual charge levied on both earned income like wages, salaries, commission and unearned income which are dividends, interest, rents. 

In addition to financing a government's operations, progressive income taxation is designed to distribute wealth more evenly in a population, and to serve as automatic fiscal stabilizer to cushion the effects of economic cycles. Its two basic types are ; - 

1. Personal income tax, levied on incomes of individuals, households, partnerships, and sole-proprietorships; and 
2. Corporation income tax, levied on profits which are refers to net earnings of incorporated firms.

However, presence of tax loopholes (whose number increases in direct proportion to the complexity of tax code) may allow some wealthy persons to escape higher taxes without violating the letter of the tax laws.

All levels of the citizens, which are poor and lower middle-class citizens often pay a higher percentage of their income in taxes than do the wealthy. Most of the poor citizens could not afford the current income tax system due to they could not afford their monthly expenses as well. For the group of middle-class citizens, they are able to pay for the current income tax, but compare to the groups of higher income citizens, this is unfair to the groups of middle-class and poor citizens due to three groups of the citizens are paying the same rate of the income tax to government. Once Social Security tax, which is the employer's part really comes out of the paycheck of the worker and state and local sales and income taxes plus assorted fees are considered, even lower middle-class workers are paying a startling percentage of their incomes to government.

Most of the people think that if they earned it then they should be able to keep their money as their future savings. Thus, nobody is willing to pay for the current tax system. 

(Written by Angel Yeoh Xin Yee)

In the conclusion, the current tax system in our country, which include Good and Services Tax (GST) and Income Tax is unfair to the middle class and lower income group. Although paying tax to the country is our responsibility and it will improved the economics of the country, but it had been bring a lot of the disadvantages to the people who are from the group of middle class and lower income.Meanwhile, the current tax system will increase the burden the people from the group of middle class and lower income and will cause the money which they earn every month not enough to cover their daily expenses. Although our country the minimum income tax rate was reduce 1% because of Goods and Services Tax (GST), but for the people of middle class and lower income group they want the government reduce another 1% because of currently the income tax rate still a bit high and quite a numbers of people cannot afford to pay for it. 

In our opinion, the government should make a survey or research for the current tax system before the tax system was start running in our country especially is GST because when GST was started in Malaysia since 1st of April 2015 till now, the inflation rate is keep increasing and causes a lot of people no matter is the buyer or seller feel very exhausted due to we need to pay higher price for the goods or services compare with the past without GST. Secondly, the government also should always listen to what the people of country said and take very serious on what they say and the government should increase the tax rate on the people who are high income group and decrease the rate on middle class and lower income group. Lastly, the most important is the government should use the money which we pay for the tax on develop our country well and the government should against the issue which very serious in our country, which is corruption. A country without corruption, that country will be very innovative and the people stay in that country which no corruption, will feel grateful and peaceful because of the government take serious on corruption and against it. 

(Written by Sim Eugene)