 |
|
|
 |
sacred cows
Save
a fortune in fines
Bad
advice on how to reduce your income tax liability from John O'Dea
Everybody seems to agree, at least the people who write in the
newspapers that I read and the people that I socialise with, that
this year's budget was not all that bad. The Minister has taxed
perks like company cars, which means that the guys driving the
Porsches, the Mercedeses and the BMWs will now have to pay that
wee bit extra for the privilege of making ordinary people like
me choke in envy on their exhaust. What the hell. I haven't heard
much gnashing of teeth. Taxing perks is not going to make much
of a dent in the lifestyles of people who enjoy perks. Their accountants
and lawyers will always find a way around anything that anybody
in the Civil Service can come up with. The stupid thing is that
they will probably end up paying their accountants and lawyers
more in fees than they will actually save on their tax bill.
For you ordinary folks out there, there are various ways to reduce
your income tax liability. Most of them are illegal. The following,
while perfectly legal are not guaranteed to work, but will save
you a fortune in fines.
Avoid making too much money:
The Income Tax code penalises success. The more money you make,
the bigger bite the Commissioner of Inland Revenue takes. You
will reach a point in each fiscal year, where you will have to
tell your employer that you will work for free. Actually your
choice will be to either work for your employer gratis, or for
the Commissioner of Inland Revenue. It's your choice.
Reduce your income:
The easiest way to reduce your tax burden is to reduce your income.
Quit your job. Sell your business. Declare bankruptcy. This method
has its disadvantages as a long-term solution.
Do not make a profit:
In theory you can lose as much money as you make, provided that
you make real money and lose paper money. Big organisations and
multi-nationals seem to succeed in doing this somehow.
Depreciation:
Depreciation is a real rip-off. Everything you own has built-in
obsolescence and decreases in value over time. Businesses are
allowed to deduct depreciation as an expense, but people are not.
Lobby with your representative in Parliament for personal depreciation.
The older we get, the lower our tax rate.
Dependents:
There are some, including the opposition who believe that animals
have the same rights as human beings. Include your pets as dependents
and obtain the same rate of deductions that you get for your immediate
family. Getting your dog a social security registration might
prove to be difficult.
Avoid being categorised as self-employed:
Before the introduction of income tax, being in business for yourself
as a Doctor, Dentist, Lawyer, Notary, Building Contractor, TV
Repairman, Lady of the Night, Stripper, Civil Servant (oops) or
whatever, was considered a noble profession. You didn't actually
work for yourself, but provided a service to your customers. The
Commissioner of Inland Revenue has not yet found a way to control
these people's incomes, so he created the disparaging term "Self-employed".
When you try and get a bank loan and declare yourself to be self-employed
your borrowing powers vanish. In the language of the Inland Revenue
Department, self employed means – audit/ex-ufficio/benchmark
the bugger.
Live in the garage of your villa:
If you are declaring an annual income of Lm5,000 and live in a
villa with pool, built on a tumolo of land in High Ridge, you
could be suspected of under declaring your income. However if
you live in the garage, you can always get away with the excuse
that you are just the caretaker for absentee owners. A lot of
nouveaux riches people do this out of choice.
Incorporate yourself:
Limited Liability Companies get lots of perks that you do not
get as an individual. For instance, Companies get to write off
to expenses health insurance, entertainment expenses, transport
and travel expenses and a host of other things, that employed
people and self-employed to not. If you cannot figure out what
you as a Limited Liability company can produce or provide that
could earn you an income, don't let it worry you. Look at the
Civil Service.
Keep your books in euros:
Instead of using Maltese Lira as the basis for your business dealings,
use the Euro. No one really knows what the Euro is worth, except
that it will be worth less tomorrow than it was worth today.
© The Garlic Press 2000
|
|
|
