Tax Planning

Everyone in Malaysia should understand the importance of taxation law. Many tax payers tends to avoid tax paying due to their lack of understanding in the law of taxation. The starting point being going back to the basic of Law of taxation – Section 75A : this section defined the liabilities of a director in tax paying.

We need to have firm understanding on the fundamental concepts of Malaysian tax :

• Income tax Vs RPGT (real property gain tax)
• Capital Vs Revenue
• Relationship of income and expenditure – there are many types of expenditure that can be deducted from taxable income aka tax relief.
• Compliance requirement – Corporate and individual are advised to adhere and comply to the law of taxation and to ensure the income tax assessment form to be submitted to IRB within the deadline given.
• Computation of tax payable.

Another are that we should not forget is E-filing – this method will be implemented in year 2007, so one must grab hold on the procedure and requirement of using the E-filing method.

 

Australia and Malaysia

There is a strong bilateral relationship between Malaysia and Australia. While the bilateral free trade agreement that Australia is proposing would bring 18.3 Billion to Malaysia in 18 yr, and 19Billion to Australia. It would bring greater export opportunities and help in RMK9, as Malaysia is the 9th largest trading partner to Australia (Petrolium, PC, Electronics), and Australia 8th largest to Malaysia (Milk, Education).

Malaysia is 11th largest inventor in Australia, mostly in the area of restaurant, gaming and tourism while the AHC is encouraging Australian companies to invest in Malaysia.

To strengthen the bilateral relationship, in 2005 the Australia – Malaysia Institute (AMI) was set up to build the link between people to people, journalism, young leaders, Muslims. The AMI young leaders are going visit to Malaysia soon and the High Commission would hope that Gerakan can participate in the program.

On the other hand that are 50,000 Australian alumni (hey, that’s me!) in Malaysia and Malaysians who are studying Business & IT are on the decreasing while the students in Servicing and Health Science is on the increasing. On the other hand, there is a change in trends as the PHD students are growing strongly! Australian Universities now have a lot more research student from Malaysia.

There are advantages of the Australian Qualification Framework and the Criteria that one should consider when choosing an overseas education as education cost is rising as the ranking of the Australian Universities are rising – this actual cost of delivering quality education.

An alternative way to Australian education is through their various education partners here. However, Malaysia has too many education institutes than other country – there would be a consolidation of twinning programs as the market is differentiating.

 

Wealth Management

Every one of us needs a financial plan. Financial Planning is not about buying insurance or unit trust, but it provides a blueprint to our financial decisions in life. In-depth financial analysis enables us to understand the impact of the financial decisions we make in relation to our financial well-being.

Effective wealth management can be achieved through an integrated program in analyzing our financial position, conducting financial planning and review, applying effective financial solutions and monitoring our assets based on the totality of our financial circumstances.

Wealth management is worthwhile at any age. Although younger people may have more options and decisions to make regarding their financial needs, changing laws and circumstances can lead middle-age people and seniors to have to adjust their financial plans and strategies as well.

To achieve the best results, take the following steps:

• Set realistic & measurable financial goals: Set specific targets of what and when we want to achieve the results.
• Understand the effect of each financial decision: Each of our financial decisions will affect many if not all financial aspects of our life.
• Re-evaluate your financial situation periodically.

Our financial goals may change over the years due to changes in our lifestyle or circumstances, such as an inheritance, marriage, birth, house purchase or change of job status. As such, revisit and revise our financial plan as time goes by.

Start planning as soon as you can: Do not delay our financial management. People who save or invest small amounts of money early tend to do better than those who do it later.

Be realistic in your expectations: It cannot change our financial situation overnight; it is a lifelong process and the results of which depend largely on our choice of actions. Events beyond our control such as inflation, changes in the stock market or interest rates, tax laws or unexpected worldwide infectious diseases will ultimately affect our financial management results.

 

Bulls, Bears or Balls of Stock Market

Technical analysis via status graphic & chart can demonstrated that the share market was the most lucrative during the period of 1980 to 1986. When the prices go up; the volume will come down, and the charts always help to aggregate the value of market.

Stock market is the reflection of the economy and“Distribution” is the creation of the market, and the small players should never go to speculative stock.

“Self Discipline” is the essential attitude in stock market. A stock market investor not to listen to the “horses mouth” to make an investment and not to invest their entire property in the stock market.

The “Rule of Arms” – to reserve a minimum of 30% safe property.

If you do not have the pain tolerance, don’t do it, never invest in stock market if you can’t bear the lost and he reminded that never borrow money for stock market investment.

Small investors should be selective and get close with the fund manager. Knowing who is running & how well does the organization perform are essential elements to be clarified.

There were no guarantee returns in stock market, never invest your entire property and do not forget to practice the “Rule of Arm” all the time. Always find out who is behind & understand the background while you decided to invest.

 

Ninth Malaysia Plan – The Budget

The followings would be observed in the budget of RMK9:

• Economy: increase from 38.5% to 44.9%
• Security: increase from 2.8% to 3%
  
• Social: fall from 40.8% to 37.5%
• Security: fall from 13% to 10.6%
• General Administration: 7.7% to 6.9%

The RMK9 has a higher emphasis on economic growth.

The development budget allocationed for security has increased marginally as a proportion of the total budget compared to RMK8, though public security is the main concern of the people at this moment of time.

Total budget for education and training has dropped from 25.7% in the RMK8 to 20.6% in the RMK9. This is a better indication on that the plan is about rather than what we were told, that our focus is to create a knowledge society and a skilled based workforce. Bread and Butter would proof to be more important after all.

 

Cashflow Session

Organised a cashflow session to practise what learnt from the book.

[ youtube=http://www.youtube.com/watch?v=1aDEB9Ceyyg ]

See original in Youtube