KUALA LUMPUR, Nov 6 — The government announced reduced rates for income tax as part of Budget 2021 tabled in Parliament today by Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz.
“The government has agreed to lower the rate for individual income tax by one percentage point for those earning taxable wages from RM50,001 to RM70,000 which is expected to benefit 1.4 million taxpayers,” said Tengku Zafrul.
The reduced income tax was part of initiatives announced by the government during the Budget aimed at lightening the burden of Malaysians amid the Covid-19 pandemic.
The government also announced increased tax relief on medical expenses, spent personally or for one’s spouse and child, for serious diseases that was raised from RM6,000 to RM8,000, while also revealing increased tax relief for full medical check-ups, up from RM500 to RM1,000.
Other tax reliefs announced sees Private Retirement Scheme (PRS) contributors receive exemption of up to RM3,000 on PRS contributions that was extended until 2025, while individuals with disabled spouses will enjoy an increased tax relief limit on expenses for their disabled partners raised from RM3,500 to RM5,000.
An increase in tax exemptions for lifestyle purchases was also announced by Tengku Zafrul, with the tax relief limit raised from RM2,500 to RM3,000.
“…where the additional RM500 is specifically provided for expenditure related to sports including participating fee for sports competitions.
“The scope of relief is also expanded to include subscription of electronic newspapers,” he added.
Also announced was the lowering of the minimum contribution rate towards the Employees’ Provident Fund (EPF), which was reduced from 11 per cent to nine per cent for a period of 12 months beginning January 1, 2020.
“This will benefit EPF contributors with a potential cash flow of up to RM9.3 billion,” said Tengku Zafrul.
