The Fallacy of a Patriotic Tax Payer

'I want this to be done this way, this way and not that way'

'I have the right to say because I am a tax payer'

'Do you know how much tax I pay? I pay ten times more than you'

Often we hear and read such retorts whenever we are in the midst of heated arguments on the direction of one's country or state. The view was that every single tax payer has the right to determine how his or her tax is being used in the development of his/her country.

Often, many choose to highlight the tax they paid as their patriotic contribution in nation-building.

The notion that tax payers are patriotic lots probably stemmed from the days of old England, where only the rich gets to vote. And since the voters are rich, they get taxed.

In Malaysia, tax is a legal obligation. It is not a patriotic duty. Let me explain.

Section 3 of Income Tax Act 1967 defines income that are taxable as incomes that are accrued and derived in Malaysia. So if your incomes fall into this bracket, it is taxable.

What does this mean? If a persons (defined here as a legal person rather than a living breathing human being) gets paid for his work performed in Malaysia, it is a taxable income. Say you live in Thailand, but you work in Malaysia, you need to pay Malaysian income tax. But say you live in JB. But you work in Singapore, income that you earn in Singapore is payable for tax in Singapore under Singapore's income tax act, not Malaysia.

In fact, under this law foreigners who work and gets paid for work performed in Malaysia need to pay Malaysian income tax.

Now, when we talk about foreigners, we have Section 7 of the same act that defined an individual as tax resident if he/she stays in Malaysia for at least 182 days in a year. This mean the foreigners you see working in Malaysia, if their incomes are taxable in Malaysia and they're living in Malaysia for at least 182 days, he/she by law is a tax resident. But does that give him/her the right to meddle in governance process in Malaysia? No, as the right to be a voter comes only if he/she is a citizen registered with the Election Commission.

What about a Malaysian who works and lives overseas but with income still derived in Malaysia? His/her income will then depend on how many days he/she is present in Malaysia. If he/she stays less than 182 days in a basis year, then he/she is classified as a non-resident tax person and gets to be taxed full and benefits such as tax relief are not available for them.

This is but a simple illustration why being a tax payer is being about the legal obligation only. In fact, if being a tax payer is being patriotic, no one would have used tax reliefs and rebates in calculating tax, and no one will be making noise about paying GST (Goods and Services Tax).

But come an individual, poor he may be. He doesn't pay his tax as his income is below the taxable income bracket. During the weekends, he dons his reservist uniform and attends his weekly training to be reservist soldier. The meagre pay from the training isn't much. But he becomes part of the machinery that defends this country in face of danger.

Or another different example. A real one. An high-ranking officer with the police force, he was sent to Sabah for a course. A day before he was to fly back to KL for his leave to celebrate his wedding anniversary with his wife, he learnt of an operation that urgently require volunteers. And he volunteered, despite knowing that the situation is precarious due to foreign intrusion by armed terrorists. And that night, he breathed his last breath, as he was fatally injured by the terrorist in Kampung Siminul Jaya. That, my dear readers,  is patriotism.

Supt Ibrahim Lebar (PGB)

To SP Ibrahim Lebar, PGB, I salute your patriotism and sacrifices.

Rosiah Dahalan, my ex-colleague, and wife of Supt Ibrahim Lebar (PGB)