Tax laws work like leeches

I have this personal vendetta against our tax laws. To put it mildly, they are the most discouraging disincentives to any would-be entrepreneurs, and pain in the arse to those unsuspecting business people who got caught in their web of disallowables.

Anyone wishing to start a business has to think of capital and some basic management support, be it on his own, with spouse or family members. Once you start making money, you will have to face the IRD. In most cases of small businesses like hawking, we can get away until we bought a new car and especially a house when we have to explain how we manage to afford it. Fair enough. But just think, you put up the capital, take the risk and when you lost money, they are not the least bothered. Only when you start making money, they come to you.

Then, you have the one-sided laws that require you to pay on time, otherwise you are penalised 10% followed by 5%, while they can take their own sweet time to refund any overpayment on your part without interest.

In the case of private limited companies, I am sure many businessmen complained about so many items disallowed for tax. Even newspapers and journals are considered irrelevant to the business. For own businesses, the directors can feel good by having the company pay the expenses, even though disallowed for tax, which in effect are borne by all the shareholders.

My wife had a concussion and was advised to be admitted to a private hospital for observation. Catscan and diagnostic imaging was done and she stayed overnight. Even with nominal fee charged by specialist (grateful thanks to Dato), the bill came to about Rm1,000. After discharge, she enquired and told me that the bill is not allowable for tax purposes. Of course, if she wanted, she could have asked the company to pay even though disallowed for tax (big difference being whether it comes from our pockets or not). She was given 5 days medical leave.

The next day, being responsible for her family business, we set off to Selama to supervise the harvesting of their small oil palm estate. While waiting for the contractors men to collect the fruits (I actually feel uneasy not doing any physical work each time I watch them labouriously hook the fruits up the lorry) I thought about the tax implication.

What if my wife decided to 'work to rule' and took the 5 days off and the harvest was stolen? For those not in this business, a ton of fresh fruit bunch (depending on percentage) is now Rm700. It just need 2 tons of pilferage and it is more than the Rm1,000 which the tax law disallows. The point I am trying to put forward is, it is ok if we lost any amount due to carelessness, mismanagement and so on, but we would be wasting our time arguing with the tax man over allowability of the medical expense.