PETALING JAYA: As the tax submission deadline approaches, the Association of Chartered Certified Accountants (ACCA) is calling on gig workers to file their taxes.
ACCA ExpertLink panel member for taxation Thenesh Kannaa said it was important that gig workers did so before the deadline.
“It is the civic responsibility of all income earners, including gig workers, regardless of age, to file and pay taxes to ensure the fiscal sustainability of the government.
“The government will then be able to provide infrastructure and services such as telecommunication and roads which are commonly used by gig workers,” he said yesterday.
A 2020 study by independent think tank Emir Research showed that about four million Malaysians, or about 26% of the workforce, were engaged in the gig economy.
A gig worker is defined as “a person who does temporary or freelance work, especially an independent contractor engaged in an informal or on-demand basis”.
Thenesh said failure to pay taxes could also cause gig workers to face severe financial and even civil issues down the road.
“Penalties for failing to file or pay taxes can be as high as 100% of unpaid taxes which will only get worse the longer gig workers ignore filing and paying taxes.
“Failure to file and pay taxes also heavily affects a person’s credit scores, making it harder for them to get loans at reasonable interest rates.
“This especially hurts a gig worker’s potential to advance in life whether it be getting a loan to buy a new home or starting their own business, thus limiting their ability to change jobs or start a family in the future,” he said.
He said trying to avoid filing taxes had become near impossible due to increased digitalisation of modern gig work and payment methods which leaves digital footprints that are easily traced by the Inland Revenue Board (LHDN).
Thenesh, who is a partner of tax advisory firm TraTax, gave some pointers on how gig workers could begin filing their taxes.
“Gig workers can easily get their Tax Identification Number (TIN) online through the LHDN website or mobile app, which they can then use to file their taxes digitally, without ever needing to physically go to a LHDN office.
“If tax filing is too difficult, hiring a licensed tax agent to help file your taxes is also an option. To discern the legitimacy of an agent, taxpayers are advised to cross-check the agent’s name with the LHDN tax agent quick search function on the Finance Ministry’s MyCukai website.
“It is also important to know that agents would never ask or need access to their client’s online tax accounts, as agents will always help file their client’s taxes under their own certified platform.
“Additionally, they can also get help for free by visiting the nearest LHDN branch, bringing all their receipts and other records of income and business-related expenses,” he said.
For gig workers filing taxes for the first time, Thenesh said there were ways to hasten the process.
“Firstly, use a spreadsheet to record and organise both your income and expenses so that it’s easier to identify how much you are making and how much income there is to declare.
“Secondly, be diligent in keeping records of all your expenses as this will make it easier for you to apply for tax deductions or claims.
“Thirdly, understand what counts as capital allowances that are used for your gig work like a new oven for a home-baking business, as they may be applicable for tax depreciation/capital allowances claims.
“Lastly, always keep up to date with the list of items that are subject to personal tax relief deductions on LHDN’s website to ensure you are getting the maximum tax savings possible,” he said.
The current deadline for manual tax filing is on April 30 and May 15 for e-filing.
However, if one’s gig income qualifies as a business income, the deadline is June 30 (manual filing) and July 15 (e-filing).
