Budget 2014 Proposals


Image courtesy of www.treasury.gov.my

Image courtesy of www.treasury.gov.my

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:

  1. Monthly tax deductions (MTD) for employees as a final tax for YA 2014 onwards.
  2. Sales tax and service tax abolished and replaced by Good and Services Tax from 1 April 2015 onwards.
  3. Individual tax rates reduced by 1% to 3% and highest taxable bracket extended from RM100k to RM400k from YA 2015.
  4. Company tax rates reduced by 1% to 19% (SME) and 24% from YA 2016.
  5. 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.
  6. RPGT rates for non-citizens increased to 30% for holding period up to 5 years and 5% in the 6th year and subsequent.

  7. 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.
  8. 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.
  9. 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.
  10. 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.
  11. 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.

Budget2014

Do log on to http://gmtrainingacademy.com/budget2014/ to book your seats now!

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About Richard

Richard Oon Hock Chye has more than 25 years of experience in taxation and business advice, with particular expertise in Malaysian property law. He began his taxation career with Deloitte Touche Tohmatsu, a ‛Big Four’ accounting firm, before starting his own practice, ConsulNet Tax Services Sdn. Bhd., in 1996. He is currently the National Tax Director of TY Teoh International, one of the leading consulting service providers in Malaysia. It is a member of the MSI Global Alliance, a global network of more than 250 independent legal and accounting firms, in over 100 countries. Richard sits on the board of two companies listed on the Main Board of Bursa Malaysia, as an independent non-executive director. He is also a regular contributor to several magazines and publications, and has shared his tax expertise on numerous occasions with organisations and property developers. As well as being a member of the Malaysian Institute of Accountants (MIA), Richard is a fellow member of both the Association of Chartered Certified Accountants (ACCA) and the Chartered Tax Institute of Malaysia (CTIM). He is a Certified Financial Planner (CFP) and holds a tax agent licence issued by the Ministry of Finance. Richard is also the author of the book, ‘Every Property Investor’s Guide To How To Pay Less Tax Legally’.

2 thoughts on “Budget 2014 Proposals

  1. I wonder what this means:

    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.

    • If you have aggregate income of not exceeding RM96,000 in YA 2013, you will be entitled to a special one-off relief of RM2,000 for YA 2013.

      If you use the IRB’s online filing system, this relief would be automatically claimed for you if your aggregate income does not exceed RM96,000.

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