Title: Role of accounting on business behaviors impacted by tax changes in Malaysia
Justification
There are many factors influence the changes of accounting importance where the role of accounting evolves along with the business changes affected by these factors. One of the factors that affect role of accounting in business field is tax.
In Malaysia, Tax is generally divided into 2 types which are direct and indirect tax. Direct tax can be defined as tax which is imposed straight to the taxpayer. In short, the payment of tax is between taxpayer towards government. Examples of direct tax are income tax from employee salary, corporation tax, property tax, and etc. Meanwhile, indirect tax is a type of charge that can be transferred to the other person. A good example of indirect tax is restaurant that collect tax charge of the food’s sold from the customer (sales tax). Other examples of indirect tax are custom duty, central excise duty, and service tax).
In brief, the history of Malaysia tax was started with more dependency towards indirect tax where establishment of direct tax has only started to take effect from 1 January 1948. This establishment has changed the trend of Malaysia tax which depends more and more on direct tax until today. In 2009 itself, government revenue has grown to 48.6% from direct tax.
The urgency of understanding changes in accounting role due to tax, become important because of several reasons. Firstly, as the globalization of the economy develops further, tax becomes an option that can be compared between one country and another. Business owner will be attracted to invest money more in a country that has less tax burden which result in higher percentage of money that can be kept by the business owners. This shows that tax has influence towards the business entities behavior in making decision of their business. Furthermore, it shows