Experts: Young taxpayers watch out
Associated Chinese Chambers of Commerce and Industry of Malaysia treasurer-general Datuk Koong Lin Loong said first-time taxpayers often face uncertainty regarding the appropriate tax return forms, making the process overwhelming.
'Additional common errors include filing tax returns without leveraging personal tax reliefs, overlooking passive and part-time income, and missing the submission deadline,' he said.
ALSO READ: Newbies becoming lost in taxation
Koong added that newcomers to tax filing should be well-informed about the personal tax reliefs they qualify for.
These reliefs encompass medical expenses for parents, lifestyle purchases such as gadgets, young mother's relief for breastfeeding equipment and early education for young children.
Moreover, there are specific reliefs for installing electric vehicle chargers at home.
'The younger generation should also understand the importance of saving and investing wisely to avoid financial pitfalls such as trading in listed companies without proper knowledge of their background and fundamentals.
'Financial planning should also encompass income protection through insurance policies,' he said, adding that accurate tax reporting would provide proof of income for future needs.
Accounting firm KPMG's senior tax policy adviser, Dr Veerinderjeet Singh, pointed out that some taxpayers mistakenly claim ineligible personal reliefs.
'Common mistakes arise from a lack of clarity about eligibility, leading some to claim reliefs unjustifiably.
'Typical reliefs are for the Employees Provident Fund and Social Security Organisation contributions, insurance premiums and lifestyle expenses.
'But it's crucial to retain the necessary documentation or receipts, as the Inland Revenue Board may request them during a tax audit,' he said.
Meanwhile, Renganathan Kannan, executive director at tax consulting firm Tratax Sdn Bhd, highlighted the significance of tax filing for young Malaysians involved in the gig economy.
'With a global trend of youth engagement in the gig economy, such as becoming Key Opinion Leaders or influencers, Malaysia is no exception.
'Whether this income is primary or supplementary, filing tax returns is essential,' he said.
Renganathan advised determining whether the income is from a business source or casual work, as the latter offers limited capital allowance claims on expenses like phones, cameras or air conditioners for home studios.
He cautioned about the necessity of timely tax filings to avoid penalties and complications, particularly for business and start-up owners seeking financing.
'Late submission penalties can adversely affect start-ups' profiles, making it challenging to build credibility with stakeholders, government agencies, investors and financial institutions,' he added.
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