Tuesday, July 19, 2011

Nobody Likes To Pay Tax

Especially if the taxes paid are not put to good use. Taxes are contributions to the government to cover their cost of running the state or the nation. I suppose there are no countries, except Brunei, that do not levy taxes on their citizens and corporations. So we resign to the fact that tax is as inevitable as death, the only difference being taxes come every year but death only once.

Although we dislike taxes we like refunds. It's like an unexpected bonus. So when we discover we are entitled to tax rebates our first reaction is to celebrate. Some are more cautious, they put the cash aside for a rainy day.

Another approach to saving taxes is when certain expenses are allowed as non-taxable expenses. This means you can take them off your gross taxable income and save on the final tax paid. For example, if your tax exempt expense of 1,000 dollars fall into the 20% tax bracket you save 200 dollars lower tax. Effectively your 1,000 dollars donation cost you just 800.

Tax exemption is a form of incentive to encourage taxpayers to make donations to qualified charities which the tax authorities have given approval to collect tax exempt donations. This practice make it easier to canvass for donations as the donors get a tangible saving. The 'loser' is the tax authority but it is a larger scheme to encourage taxpayers to contribute back to the needy social projects.

After being in operation for almost 3 years the society I head, PBSNS, is given tax exemption status. It is indeed a happy moment for both myself and my staff there. We hope with this impetus we will drive faster towards strengthening our work to train the learning disabled in Negeri Sembilan.

1 comment:

Anonymous said...

Dear Peter,congrats on PBSNS tax exemption status.Keep up the good work.God Bless regards AL MAL.

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