The government’s announcement that civil servants’ bonuses are tax-free has caused a great deal of injustice to many wage earners working in the private sector.
Prime Minister Datuk Seri Anwar recently announced that all state civil servants bonuses and special assistance payments are exempt from tax, which is due to the fact that the bonuses of civil servants are not very high, getting about RM700 to RM2,000 per month, which is more than the number of tax exemptions will not affect the government’s income.
In this regard, many working people in the private sector disagree and hope that the government can treat them equally, so that the bonuses of the private sector can also be tax-free. It would be very discriminatory if the government only gives tax exemption to civil servants’ bonuses while the private sector’s bonuses need to be taxed.
Under the current income tax law, bonuses are taxable, so bonuses received by working people are subject to personal income tax. If the tax is deducted directly from the salary every month (PCB), the bonus received by the wage earner will be the amount that has been deducted.
If the government were to exempt the bonuses of private sector workers from taxation, this would have a significant impact on government revenue. Therefore, it is generally predicted that unless the government reforms the existing subsidy mechanism to reduce the government’s financial burden, it should not be possible for the government to exempt the bonuses of private sector workers from taxation.
