Hi, You Need To File Your Income Taxes Even If You Don't Earn Enough To Get Taxed

Even if the refund is RM0, you still need to file your income taxes.

Cover image via Kelly Sikkema/Unsplash & Harian Metro

Follow us on InstagramTikTok, and WhatsApp for the latest stories and breaking news.

If you've ever thought that you don't need to file your taxes because your income is "too low" to be taxed, you might be mistaken

Every Malaysian individual who earns an annual income of more than RM34,000 after the Employees Provident Fund (EPF) deduction is required to declare their income.

So, if your monthly income is approximately RM2,833 (after EPF deduction), you are expected to file your income taxes on time to avoid penalties.

Essentially, you must file your income taxes even if the total tax refund is RM0

Not filing your taxes when you're making RM34,000 or more can lead to a fine ranging from RM200 to RM20,000, imprisonment, or both. 

If you submit your taxes late within the first 60 days, you will incur a fine of 10% more than the tax payable. If the delay persists, an additional 5% will be imposed.

Image for illustration purposes only.

Image via Kelly Sikkema/Unsplash

Why must I declare my income or file my taxes?

The government uses tax money to run and improve Malaysia.

Tax revenue is allocated for national security, physical development, and infrastructure such as roads, hospitals, schools, as well as economic and social development, such as health services, education, and the people's welfare.

Filing taxes, even when you're not earning enough to be taxed, helps the government collect income data, ensuring everyone contributes to public services, and enables the government to channel welfare schemes. 

Filing your taxes, even when not making enough to be taxed, saves you from future hassle when you do start earning enough.

Image for illustration purposes only.

Image via Polina Tankilevitch/Pexels

When we declare our income every year (file our taxes), we get to claim tax rebates for certain items or services, including medical expenses, childcare costs, select lifestyle purchases, Internet, computers and phones, gym memberships, and more.

The goal is to take back as much money as you have paid through your annual taxes.

For the full tax relief list, you can visit the LHDN website here.

Don't know how to file your income tax? Here's a step-by-step guide for first-timers:

If you haven't received the RM100 eMADANI handout, it could be because you didn't file your taxes this year:

You may be interested in: