When the Taxman Draws the Line at B$50,000

The Luxury We All Paid For

Someone asked me why the government is tightening tax rules when daily costs are already high.

I looked into it — and found that sometimes, what feels like a burden is actually a correction.

Because fairness isn’t about who drives what — it’s about who does the right thing when nobody’s watching.

A quiet rule in Brunei’s taxation system — the one that caps car deductions at B$50,000 — may sound technical, but it tells a deeper story about fairness, responsibility, and shared sacrifice.

Read my latest KopiTalk reflection on how small policy shifts can reveal big truths about who we are as a nation — and who really pays for comfort.

🔗 Read here: When the Taxman Draws the Line at B$50,000

By Malai Hassan Othman | KopiTalk with MHO
 
“Did you know? All this time, we might have been subsidising someone else’s luxury.”
 
Every time a company writes off the fuel, insurance, and servicing of an expensive car as “business expenses,” part of that cost quietly escapes taxation. 
 
When those taxes aren’t paid, the government collects less revenue. This shortfall, though invisible, contributes to Brunei’s ongoing budget deficit — the widening gap between what the nation earns and what it spends to sustain public services and subsidies. 
 
Over time, such leakages drain millions that could have bolstered our fiscal position. Less tax collected means fewer resources for schools, clinics, infrastructure, and job creation — while ordinary citizens and honest businesses end up subsidising someone else’s luxury.
 
This story didn’t begin in an office or a policy paper. It started with a message from someone I know — frustrated, confused, and a bit angry.
 
“Assalam bos… Apa g ni?!! TDE... Mcm-mcm saja mun bnr. Kawal dulu kenaikkan barang harian… dan gaji penjawat awam... Transport awam pun kurang.”
 
He had come across a copy of the new tax clarification and sent it to me, puzzled that while prices were rising and wages remained stagnant, the government seemed to be tightening deductions instead of subsidies. His friend told him, “Refer to you, boss.”
 
That moment made me pause. If even ordinary, educated Bruneians were struggling to understand why this rule mattered, perhaps it was worth looking deeper — not to defend or attack it, but to explain it. 
 
Because sometimes, behind a policy that seems unpopular, lies a story about fairness that few have taken the time to tell.
 
So I began to dig deeper. What exactly was this “tax rule” everyone was discussing, and why did it stir so much frustration? 
 
Was it truly another burden on the people, or something else altogether? The more I read, the clearer it became that this wasn’t about raising taxes — it was about closing a quiet leak that had been siphoning public revenue for years.
 
That’s when I realised the Ministry of Finance and Economy (MOFE) wasn’t introducing a new tax; it was reaffirming an existing rule under Section 11(1A) of the Income Tax Act (Cap. 35). 
 
If a company’s car costs more than B$50,000, it cannot claim the full running expenses for tax deduction. The deductible amount must be reduced in the same proportion as if the car cost only B$50,000 — the threshold of reasonableness. 
 
Suppose a company buys a B$60,000 car and spends B$1,300 a year on fuel, insurance, and repairs. Under this rule, it can only claim (50,000 ÷ 60,000) × 1,300 = B$1,083.33. The remaining B$216.67 — the “luxury portion” — is no longer tax-deductible. In short, drive what you wish, but don’t expect taxpayers to help pay for it.
 
Some might dismiss this as just another bureaucratic measure, but it’s far more than that. 
 
It’s a small but powerful act of fairness. For years, some companies registered luxury vehicles under their business names to enjoy personal perks disguised as corporate costs. 
 
MOFE’s Public Ruling PR 02/2017 already clarified that all business deductions must be “wholly and exclusively incurred in the production of income.” 
 
That phrase places the burden of proof on the taxpayer — meaning you must demonstrate that the expense is genuinely for business, not for prestige or personal comfort. The new enforcement simply draws a visible line between necessity and indulgence.
 
By capping deductions at B$50,000, the government ensures that honest small businesses using standard vehicles stand on equal footing with larger firms running luxury fleets. It keeps the system fair and accountable. 
 
Honest SMEs still receive their full deduction, while the state protects public revenue and reinforces the discipline of good governance.
 
Even for large corporations, it serves as a timely reminder that corporate social responsibility begins not with CSR campaigns, but with responsible taxation.
 
“I drive a second-hand Hilux and still pay my full tax,” said one small contractor half-jokingly. “Maybe fairness isn’t about who drives what — it’s about who does the right thing when nobody’s watching.”
 
To understand the real impact, consider a simple scenario. If 1,000 businesses each claimed an average of B$30,000 in excessive vehicle expenses, that amounts to B$30 million in unjustified write-offs. 
 
At Brunei’s corporate tax rate of 18.5 per cent, that translates to roughly B$5.5 million in lost revenue every year. 
 
Over a decade, that could reach B$55 million — money that could have built homes, upgraded hospitals, or funded youth development programs. And that’s just from one type of loophole. Add in others — businesses operating under multiple small licenses to avoid corporate registration, under-declared income, and “company assets” that double as personal property — and the total loss to the treasury could be many times higher. 
Every dollar lost through creative accounting widens the deficit, weakens our fiscal resilience, and delays the reforms needed for Brunei’s economic sustainability.
 
But this isn’t just about accounting — it’s about integrity. Good governance doesn’t always come through sweeping reforms or grand policies. It often starts with quiet, sensible corrections like this one. 
 
Drawing a line at B$50,000 sends a message that transparency matters, that luxury shouldn’t hide behind necessity, and that accountability starts with small habits. 
 
When business owners understand that fair play in taxation strengthens the entire economy, they stop viewing compliance as a burden and start seeing it as nation-building.
 
In a just society, success isn’t measured by what one can evade but by what one contributes back. Luxury itself isn’t the problem — it becomes one only when it’s disguised as necessity, and the public ends up footing the bill. 
 
The B$50,000 rule may seem minor, but its spirit is moral: everyone should carry their fair share. And that’s how a nation strengthens its foundation — not by punishing ambition, but by protecting fairness.
 
So what do you think? Should the taxman draw more such lines in other areas to seal the leaks that quietly drain our national budget? Or should businesses be trusted to self-regulate with integrity? 
 
Whichever side you’re on, one thing is clear — fairness begins with honesty, and every small rule that closes a loophole brings us a little closer to the Brunei we all want to see.
 
Because fairness, like faith, must be practised — not preached.
 
And sometimes, all it takes is a simple line on a tax form to remind us that integrity is the truest measure of national wealth. (MHO/10/2025)
 
KopiTalk with MHO
 
Where ordinary rules tell extraordinary stories about who we are, how we earn, and what we owe to each other.