Budget 2014

GST from April 2015

Prime Minister Datuk Seri Najib Tun Razak announced GST at 6% to be introduced from 1st April 2015, with the existing sales and services tax to be abolished.

Some of the items excluded from GST include:

• Government services
• Public transport
• Food items such as cooking oil, spices, salted fish, rice, flour.
• Electricity for domestic use and piped water
• Sale and purchase or rental of residential properties

To assist businesses prepare for GST, the government has proposed:

• Accelerated Capital Allowance until year of assessment 2016 for purchase of ICT equipment and software
• Tax deduction for expenses incurred relating to GST training for years of assessment 2014 and 2015.

Personal tax rates

• Individual tax rates reduced 1% to 3%.
• Chargeable income subject to maximum rate to be increased from exceeding RM100,000 to exceeding RM400,000.
• Tax bracket reduced from 26% to 24%, 24.5% and 25%.
• Individuals who pay tax through PCB deductions no longer required to file tax returns. PCB considered final tax.
• Special tax relief of RM2,000.00 for tax payers with monthly income of up to RM8,000.00 in 2013.

Company tax rates

Corporate tax rates reduced by 1% from 25% to 24%

SME tax rate reduced by 1% from 20% to 19% effective year of assessment 2016

Minimum wage tax deduction

Private sector employers to receive tax deduction for difference in wage cost when adopting the Minimum Wage Order 2012 for wages paid to employees from 1st Jan 2014 to 31st Dec 2014.

Final tax

Malaysian tax payers with one source of income from employment are no longer required to submit income tax returns from year of assessment 2014.

Monthly tax deductions (MTD) made would be considered the final tax.

To ensure that MTD is computed accurately, employees should notify their employer of changes to marital status, number of children, divorce, etc.

Tax payers who are satisfied with the amount of tax deducted and paid to Lembaga Hasil Dalam Negeri need not submit their Income Tax Return Form.

However, if the tax payer feels that he or she has either over or underpaid taxes, they have the option of submitting the returns as usual.