Saturday, November 29, 2008

My sharings.. to all ACCA F6 Students..

This post is dedicated to all my friends previously from TARC and who are now taking ACCA External F6 Taxation and going to sit for F6 examination on 1st December, at 3.00pm. Enjoy reading~

First of all, i shall copy back what did i mention in previous post.

Well, where does my interest in taxation come from?

I believe, for every successful businessman, who owns family business, or starts any businesses from scratch, he or she hates to pay tax to the Government. For a managing director in a controlled company aka small medium enterprise (SME) company, again, I believe they are not willing to share their 20% of their hard-earned profit with the government. Assuming that you made RM1 of net profit, and you have to remit part of the earnings, 20cents, to the Inland Revenue Board. Are you willing to do so? That’s exactly my point. As a consequence, many of them did not comply or follow the rules, and they are trying to evade the tax willfully. Yet, the earnings they tried not to pay to IRB will always be their liability. Do remember that IRB has the power to audit your account within 7 years after the end of a year of assessment. Perhaps one day your company will be investigated by the IRB. Nobody knows. Furthermore, some businessmen or employees do not know the very basic of the rules governing on income tax and may overpay taxes to the IRB. Undeniably, tax knowledge is vital for every businessman and employee. So, it goes without saying, tax planning is important!

As aforementioned, I gotta bring you all to my thoughts of taxation.
For me, I have strong interest in Taxation is because I love Taxation this paper. Why I love this paper so much?

Let me bring you all to my situation of studies.
I love Taxation is because I HATE TAX! I hate IRB.. I am sure there are many businessmen having same thoughts as mine. To get a strong desire in learning taxation, you have to put yourself to the position of a businessman, a director of controlled company. Therefore, you will be subjecting to Business Tax and Individual Tax.

Nowadays, IRB approachs door to door and giving letter to ask you to submit your N years ago accounts, most probably in 4-5 years ago. IRB makes you become stressful. Although you are the one who prepared your company accounts in a very clean hand, you cannot escape from such a tax audit once your company has been established for a while and become well known.

You gotta know this..
If you follow the law and paying tax all the while, either fully reported your proceeds or evaded the tax, IRB still will come to you if you have an established business and have a big car, big house and nice lifestyle.

Further, in Malaysia, majority businessmen and entrepreneurs are Chinese. In history, chinese is very good in doing business or trading. I believe the reason why our ancestors came to Malaysia in very long time ago is most probably because of the competitive business market in China. They came here with nothing. Started their business from scratch. The best example was our late Tan Sri Lim Goh Tong. As there are a lot of chinese entrepreneurs, the major income tax contribution to the G is from chinese taxpayers. But, does the G do something for us? Undeniably, there are occurrence of corruption in politics, the G in more favor in helping there Bumiputra, as consequences, here there is a guy, Namewee who is expressing our thoughts via video and song.

Paying tax to the G is everyone obligation, including sales tax and service tax. The major objective is to give to the G as their revenue. They received much from us, but, are they contributed the same kind of benefits to us? That's why you hate to pay tax.

As such, you gotta know what is tax, because there is a good demand in the market. Many of businessmen do not have much taxation knowledge. This is good for yourself as a future taxpayer and also for your careers. As what a lawyer says "Know the law is to break the law".

But, please don't get mixed with F8 auditing. In audit paper, you gotta think that the management of the company is acting as an agent under stewardship position. They do not mind to pay higher tax, as long as they can make their FS become more attractable. This is so called "window dressing". The reason is because they are working for shareholders. The company is not belong to them. So, the main thing is to report their company is profitable and to attract investors to invest. Audit is talking at big companies which are listed in BursaMalaysia.

In auditing, the stewards are trying to make their FS into a better look, so they most probably will increase their sales, reduce their inventories, reduce their trade payables and so on.. some credit controller or finance managers get involved in teeming and ladding. So, you gotta audit and based on your opinion to give a true and fair view on their FS, reasonable assurance.

I shall talk back to taxation. You gotta think that it is not worth to pay your tax. So you gotta know everything in taxation, including withholding tax and so on. Otherwise, if you employed an oversee contractor to do your project and you forget to withhold 10% of his salaries, hehe.. you will kena!!

Public rulings. You have to go through this and know it well. It is just a guideline which is an order to obey. Some of it is extract from part of the Act, some is not. Therefore, some people are not satisfied with the treatment and put it into court decision. When you read the cases, it is very interesting! Dr. Choong Kwai Fatt's book got a lot of cases. And the most interesting part is Offence and Penalty that chapter. You can see some people win the case with reasonable care as excuse. Cool!

For F6, it is a fundamental paper... not that difficult! When you are dealing with P6, you will think F6 is just... peanuts!
If you compared to P6.. which including Pioneer Status, Transfer Pricing, Investment Tax allowance, Reinvestment Allowance, Bilateral Taxation.. it is more difficult!

In a nutshell, i wish all of you good luck and all the best for ACCA F6. The question will definitely be tricky. But, I know you can!!~ Good Luck!

* Do drop me a comment if you think useful to you. Thank you!

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