It’s clear that Malaysia has had its tax system which was implemented since many years ago. However, how many people of you really familiar with that? Generally, there’re broadly 2 categories of taxes, which are direct and indirect. A direct tax means the tax which bear by person and he/she need to pay for it. An indirect tax is paid by a person who claims it from the consumer of his goods or services.
Is income tax a direct tax or indirect tax? Yes, income tax is a direct tax because the taxpayer files his/her annual tax return and liable to pay the tax due. On the other hand, the trader who imports goods is responsible for paying the import duty and sales tax. He does not bear the tax but passes it on to the consumer by including the hidden amount in the price of goods.