The National Budget 2016 has been announced on 23 October 2015, by the Finance and Prime Minister. The budget gives a certain incentive to medium group income earner and higher taxes on highest group income earner.
Under Goods And Services Tax (GST)
The Zero Tax Relief will be extended to more product, such as infant milk powder, horse beans, lotus root, water chestnut, brown sugar, handphone reload card, medicine under medicine Act 1952, East Malaysia rural air ticket fare, will be effective from 1 January 2016.
However, the handphone reload card will be effective from 1 January 2016 until 31 December 2016, for a period of one year.
Under Income Tax (IT)
The budget is now benefiting the medium group, following are the relief available:
Personal : the taxpayer will be eligible to RM9,000 personal reliefs. This relief is available automatically, without the need to apply. The aim is to relieve the taxpayer burden.
Spouse: the taxpayer's spouse, whether the a husband or a wife who does not have any income will be available automatically as long as they are legal spouse. The relief available is RM4,000. If the taxpayer who has divorced with the spouse, and pay a alimony to his / her former spouse, will also eligible for the spouse relief.
Children : the children who are 18 or below, will be relief RM2,000 per child, the child must be studying full time and not marry. Furthermore, if the child study tertiary education, whether study locally or abroad will be given a relief RM8, 000. Similarly, if the disabled child who is studying in tertiary education he or she will be RM14,000 (RM6,000 for disable relief and RM8,000 for child study relief).
Parent : For the first time, the taxpayer will be given a provision for parent will be available to both of the parent RM1,500 each. However, the following rule has to be adhered.
1) The taxpayer does not claim the parental care and medical relief,
2) The parent is a biological parent, or legal adopted parent,
3) Both the parents are more that 60 years,
4) Both the parents are resit in Malaysia during the assessment year,
5) The parent annual income not more that RM24,000.
Employee : The eligibility for mandatory contribution to the Social Security Organisation (Socso) will be increased from a monthly salary to RM4,000. Upon the death of the contributor during the term of employment, the next-of-kin will receive a monthly compensation of up to 90%.
On the other hand, the national budget for 2016, also imposed a “rich man tax”. For those who chargeable income between RM600,000, to RM1,000,000 will increase the tax from 25% to 26%, meanwhile those who chargeable income RM1,000,000 or above will be increase the taxes from 25% to 28%.
Conclusion :
Even though, the year of 2016 budget does not provide any candy for Malaysia Citizen generally, however, the government is putting an effort to control national deficit around 3.1% of a gross domestic product (GDP).
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