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1. Rara Ismail is a Malaysian citizen and tax resident and divorced for a year with no kids. On 2 January 2018, she accepted a job offer in Kometik Dr Diva.

Details of the income, benefits and expenses incurred by Rara in 2018 are shown below:

• A salary for the year of RM160,000.
• A contribution of RM23,400 paid by her employer towards her employees provident fund.
• During the year, Rara purchased company-own products such as toiletries and soaps worth RM5,000.
• Traditional Chinese medical treatment at Hospital Ee Lam Wah, an approved hospital costing RM650, paid for by her employer.
• Hotel accommodation provided by her employer for the month of January 2018 at a cost of RM200 per day for 30 days.
• A personal computer worth RM3,000 for her personal use as a gift from her employer.
• A reimbursement claimed from her employer of RM9,000 to cover the cost of part of the wages of a maid employed by Rara .
• RM14,000 earned from her blog during the year. She blogs in her spare time.
• Rara bought books costing RM5,010 from Playhotguys.com. She did not realise that 2 books worth RM500 are banned in Malaysia and have been confiscated by the customs. Rara has the original receipts for all these purchases.
• A payment of RM2,000 for her UNIFI subscription.
• Zakat contributions made of RM12,000.
• She donated RM5,000 worth of can food to Penang Homeless Shelter, an approved charitable institution in Malaysia.
• Payments of RM7,000 towards a deferred annuity scheme, which was approved by the relevant authorities, as part of her retirement plan.

Required:

Compute the income tax payable by Rara for the year of assessment 2018.

[22 marks]

2. Compensation through the Voluntary Separation Scheme (VSS) is normally taxable, Describe instances whereby the VSS compensation can be exempted from income tax.

[8 marks]

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