On 25 October 2013, our Prime Minister cum Finance Minister, Datuk Seri Najib Tun Razak, tabled the much-anticipated Budget 2014 proposals. Much-anticipated by many due to the expected changes to the Real Property Gains Tax (RPGT) laws to curb property speculation and the announcement of the introduction of Goods and Services Tax (GST) in Malaysia.
Along that front, our PM didn’t disappoint us, as among other proposals, those changes were among the major highlights of revenue collection measures that became the talk of the town the past few days.
As a recap, the following are some of the highlights of the Budget 2014 proposals:
- Monthly tax deductions (MTD) for employees as a final tax for YA 2014 onwards.
- Sales tax and service tax abolished and replaced by Good and Services Tax from 1 April 2015 onwards.
- Individual tax rates reduced by 1% to 3% and highest taxable bracket extended from RM100k to RM400k from YA 2015.
- Company tax rates reduced by 1% to 19% (SME) and 24% from YA 2016.
- RPGT rates revamped to 30% for holding period up to 3 years, 20% in the 4th, 15% in the 5th and 0% thereafter (for individuals). 5% for companies in 6th year and subsequent years.
- RPGT rates for non-citizens increased to 30% for holding period up to 5 years and 5% in the 6th year and subsequent.
- Special relief of RM2,000 for resident taxpayers earning up to RM8,000 a month (aggregate income up to RM96,000 a year) in 2013.
- In conjunction with the implementation of the minimum wages policy, the difference between the original salary and the minimum wages paid by SMEs, cooperatives, associations and organizations employers for the period from 1 January 2014 and 31 December 2014 be given further deduction.
- Pioneer Status or Investment Tax Allowance for new investments in 4 & 5 star hotels in Peninsular Malaysia, Sabah and Sarawak be extended for applications received by Malaysian Investment Development Authority (MIDA) from 1 January 2014 to 31 December 2016.
- Accelerated Capital Allowances (ACA) for expenses incurred on the purchase and installation of information, communication and technology (ICT) equipment and software extended until YA 2016.
- My personal favourite as a practitioner, secretarial fees (up to RM5,000) and tax filing fee (up to RM10,000) allowed as a tax deduction from YA 2015 (finally!!)
For a copy of the Prime Minister’s Budget 2014 speech, it can be downloaded at http://www.treasury.gov.my/data/speech/bs14.pdf
I will elaborate on some of the proposed changes in my upcoming posts, over the next week.
However, in order to have a full appreciation of the implications of the Budget 2014 proposals, I would encourage you to attend our upcoming Budget 2014 seminars which will be held in Penang and Kuala Lumpur.
Do log on to http://gmtrainingacademy.com/budget2014/ to book your seats now!