The performance artist and taxes, EPF & SOCSO
By LENNARD GUI

Benjamin Franklin, the great US writer, scientist, inventor, statesman and political philosopher, has often been quoted as saying there are only two things certain in life: death and taxes. That’s something the Malaysian performing arts scene has had to come to terms with over the past two years.

But while taxes and such may sound painful to freelance performing arts practitioners, according to Chae Lian Diong, founder of theatre company Gardner & Wife, there are plenty of positives to be gained from setting up an account and paying – or at least filing – your arts-related income.

“EPF (Employees Provident Fund) and SOCSO (Social Security Organisation) have a category for arts practitioners, so you can contribute to these agencies and your account without having a company if you get an income from theatre. But because it’s voluntary, the number of people filing their theatre salary for taxes and EPF is about 3% only,” she says. “So the reality is that most freelancers won’t do it unless they’re forced.”

Diong says, however, that having a tax file or an EPF account for your theatre income is going to be helpful to you in 20 or 30 years time. “The truth is that unless they make it mandatory, a lot of freelancers and practitioners aren’t doing it because some don’t know how long they’re going to be doing it for, or don’t think they earn enough…”

That, she adds, is another issue that needs addressing for the performing arts in Malaysia – the matter of a minimum wage because the work is (in some respects) intangible and freelance performers often get exploited.

“If you’re an actor or emcee, people think it’s easy – that you just stand there and talk. But it takes a lot of practice and rehearsals to make it look easy,” she says. “It’s a job like any other and we should be paid properly for it. But that perception of it ‘being easy’ is going to affect arts practitioners in the long run because if it’s not regulated and there isn’t one body to look after us, we’re left to look after ourselves.”
As a committee member of the Voice Guild Malaysia (www.voiceguild.org), an association for voiceover talents, Diong knows what she’s talking about. The organisation was set up about 20 years ago because freelancers in the industry were facing problems getting paid on time – if at all sometimes, she adds – and to set some kind of a standard rate for the expertise provided.

“So now we have guidelines that govern the fees paid for the duration of the work, the scope of the work, etc. And it was hard at first because clients were not receptive to us and freelancers ended up under-cutting each other.
But we’ve got to stand up for each other, and demand to be treated and respected as professionals.”

Safety net

Diong says paying into your EPF (www.kwsp.gov.my) is easy because you can just sign up and contribute as you earn, and this gives you better financial security, more so than saving your money in a bank, because the interest rates are higher. She really encourages those in theatre and the performing arts to start an account even if you’re a freelancer.

“The tricky one is SOCSO (www.perkeso.gov.my) because that requires you to pay every month, so even when you’re not working or if you’re not earning much, you still have to declare something. There’s no room for you to declare yourself as unemployed – you have to work out some sort of minimum monthly salary for yourself based on the jobs you do get. Just make sure that it’s not too high that you can’t afford to continue paying when you don’t have a job.”

The good thing about SOCSO, Diong says, is that it’s work-related, so for example if you’re heading to the theatre to do your show, or going home after a rehearsal event, and you get into an accident, you can claim medical coverage for that.

And because it’s a government agency, you don’t have to ‘fight’ them – as you sometimes would with a private insurance company because your policy might not honour your claims.

“SOCSO also recognises a lot more jobs, even in the performing arts, and there are several categories you can put yourself under. It’s especially helpful if you’re a set builder or a technician, and you get injured, and you need to make a claim,” she adds.

Declaring your taxes (www.hasil.gov.my), she says, is also beneficial for those in the performing arts because if you decide to buy property for example and you need a bank loan, they will want to see that you’ve got a good credit history, she says. “You might not have to pay any taxes because of what you earn as a freelancer, but the important thing is that you file your salaries, so that you have an account and that might help your credit score in securing a loan.”

Because you have plenty of deductions you can make in your tax return, she adds, you might never have to fork out anything. “But you can show the bank that your account has been active as evidence you’re a taxpayer.” She cites the pandemic as an example of how having a tax file benefits those in the performing arts. “Because the government is offering some monetary relief, you can qualify for these funds if you have a tax account.”

Having been an actor and someone who has run her own theatre company, she empathises with performing artists if you feel overwhelmed with the paperwork. “It’s very much an administrative thing, so if you’re only the artistic sort, find someone who can help you navigate your taxes. My only tip is: Keep all your receipts. And try not to be paid in cash. Everything that’s banked in will be in your bank statement, and therefore easy for you to track.”

What is SOCSO?
SOCSO (Social Security Organisation) is sometimes referred to as PERKESO (Pertubuhan Keselamatan Sosial). It is a government agency formed in 1971 under the Ministry of Human Resources. SOCSO gives social security protection in terms of cash and benefits to employees in the private sector in case of workplace injuries, emergencies, occupational sickness, and death. Both employers and employees should contribute to SOCSO payments.

What is EPF?
The Employees Provident Fund is one of the world’s oldest provident funds. Established in 1951, EPF helps the Malaysian workforce save for their retirement in accordance with the Employees Provident Fund Act 1991. Today, EPF continues to refine its vision to not only stay relevant but to create a better retirement for all members. This strengthens the commitment in safeguarding its members’ savings and increasing the dedication in providing excellent services.

Freelancers and taxes
All individuals are required to file their taxes if they already have a registered tax file, or if their annual income exceeds RM34,000 after deducting their EPF contributions. As long as you have reached the specified income threshold that can be taxed, then it is necessary for you to file your taxes. If you’re a freelancer, you would not have an EA form from your employer. Hence, you will need to tabulate your own profits by checking your invoices and expenses. It’s a good idea for you to do your bookkeeping accurately as you conduct your business throughout the year.
Depending on whether you’ve registered your freelance work as a business or not, you may be required to use different forms to file your taxes. If you’ve not registered your freelance work as a business, then fill up the BE form. If you have registered your work as a business, then the right form to use is the B form.
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