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Personal Income Tax on Brunei Darussalam- Part 1

Awhile ago @BruneiTweet asked a few people about tax income for Brunei Darussalam. Thereby I will give my thoughts on the highly charged subject. Those who are unfamiliar with the Bruneian economy, take note that we don’t have personal income tax. Yes, we don’t. While other countries such as US pays say 20% in personal income tax we pay 0%. Mainly because we have enough oil reserve to supplement our national income. This is both a blessing for now and a curse for the future.

You may say that Brunei is striken with the Ditch Disease. Giving us this tremendous pressure to extend our industries beyond the black gold; which generate about 80% of the national revenue. Thus it is a race against time before the oil wells run dry. A Brunei Shell engineer disclosed to me in a one-off-comment that it will finish out within 35 years. I have no way of confirming this figure, but then it won’t take so much thought that by the next 2 decades or so the world would then be able to find an alternative for oil and gas. How would Brunei supplement its income then?

Thus in this article I will give my solutions to the issues we face in generating revenue. I will first outline the importance of income tax to an economy, the challenges of implementing it and finally the regulations Brunei should impose to fend of the evils of usury.

Firstly, income tax, it is a very controversial subject. It would shudder even the upper echelon society. People hate it. No one wants to give their own hard eared money to an institution. Yet it is one of the main generator of national revenue. For this article however I would only limit the subject within the boundaries of personal income tax, because here is where the most money will be made. Or else how can government generate enough money to initiate investments and expenditures after there’s no oil? Where’s the money then to pay its public servants, road, bridge, subsidies and hospitals etc?

Look at it at this way: A nation is like a corporation. It needs to make value and money lest it go broke. A corporation is always competing against others in getting the most money in return for goods exchanged. While at the same time taking care of the shareholders and stakeholders. The President/Prime Minister is the Chairman and the ministers, the board of directors. Enterprises as investors; The public, its customers. Bottom line here is that they have to make money by providing services that make monetary gain.

I don’t quite see that. Since over 70% of the national labour work for the government, it made one think, does this indicate an over-supply of labour? Is it really necessary? Should we downsize? Then would this settle the issue of foreigner workers competing jobs in the private sector? How about the bottle-necks in the organization? Shouldn’t the government kick ineffective people off their organization to make way for the skilled? If you own a business and hired a good-for-nothing worker, won’t it be logical that you kick them out?

But I want you to see the big picture: Can those 70% of government labour generate enough national revenue at their work now? Apparently not. I don’t see how they can make money by typing documents or holding sports activities. In terms of social value yes but in terms of profit, sadly no. In fact they are participating in increasing the rising expenses. Afterall who paid for their wage? Where does that money come from if not the black gold?

One option on how a nation such as Brunei can really diversify is by imposing personal income tax to the people. Imagine the revenue that could be realized?!! A month ago I encountered Brunei’s “annual financial statement” during the 60’s in Brunei Hall’s library. I skimmed over the page and was surprised. Brunei implemented Personal income tax at that time, and has gotten a fair amount of revenue. It was money coming in.




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4 thoughts on “Personal Income Tax on Brunei Darussalam- Part 1

  1. Nice article. great points. Brunei is stuck in time. where resistance are always to keeping us from growing.


    Posted by Steven Goh | November 14, 2012, 4:28 pm
  2. Btw, no one likes tax, however, its a must to move forward. every bruneian wants a better standard of living from services. all have to pay. the fear is that, by paying taxes, those good for nothing are screw.


    Posted by Steven Goh | November 14, 2012, 4:29 pm
  3. I do agree with you at some points. It’s true we are heavily dependent on oil and gas, and as you said personal income tax may be one of the option to generate revenue to run this country. However, this problem should be approached holistically and
    not just to view it from one point, do not resembles other countries who have
    move forward but disregard the obligations towards the Al-Mighty, the blessing
    of the economy is really important to ensure we reach a just and desired
    socio-economic status. Therefore the first step is to ensure every Muslim to
    fully embrace an Islamic lifestyle. There are many reasons why fully embracing
    Islam in their daily lives would help to sustain our economy, in Islam each
    Muslim has to uphold their ‘amanah’ given to them and failure to do so will
    lead to major sin, so if every Muslim in Brunei understand this concept, with
    Allah’s will, things can’t go wrong, and that’s just from your point of their
    responsibility towards their employer a.k.a Government. What if oil-well runs
    dry? Yes that’s right but the Bounty of the creator cannot be questioned and it
    is up to him to continuously make them available to our beloved country and
    hence the importance of ‘zikir’ (remembrance) of Allah is important. What if
    oil and gas no longer be as valuable as it is now? The cost of having an
    alternative is so huge that to replace oil and gas may be impossible – but who
    knows? Therefore it is now when we need to understand the importance of skills
    and knowledge, not your academic qualification to bring you security in this
    life. Therefore we need to be a leader instead of the follower, discover,
    invent and put ourselves out there instead of getting served by others. Make
    Brunei as a place of innovation and discovery and this can only be done if no
    hatred and especially envy exist in the society, if one moves a step further
    than us, we praise them and we work as hard as possible instead putting them
    down. Bruneian should stop seeing working for the government as eternal
    security instead praising those who are self-employed. Another point is to
    instil the mindset in every Bruneian that getting themselves a place in higher
    institution be in locally or overseas is to get as much knowledge as possible
    to equip them to be different than others, to be innovative and to use the
    knowledge earned to make money instead of thinking as long as I got my degree,
    employed by the government, I have climbed the highest step of the ladder.
    Encourage your children to get the skills and knowledge to make money instead
    of earning them, and once they have successfully making abundant wealth,
    remember those below them – poor and needy, that their right is upon his


    Posted by Muhammad | November 17, 2012, 12:27 am


  1. Pingback: Personal Income Tax on Brunei- Part 2 | The AMO Times - Taxes-Info.com - September 5, 2012

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