KUALA LUMPUR, Oct 10 (Bernama) — A total of 300,000 individuals will no longer have to pay income tax after the rate is reduced by one to three percentage points next year following the implementation of the Goods and Services Tax (GST). Prime Minister Datuk Seri Najib Tun Razak said with the implementation of GST, the government would be able to reduce tax burden on the rakyat. “For year of assessment 2015, tax payers with family and income of RM4,000 per month will not have tax liability,” he said when tabling the 2015 Budget, themed ‘People Ekonomi’ in Parliament here Friday.
Najib, who is also Finance Minister, said the individual income tax would be restructured whereby the chargeable income subject to maximum rate would be increased from exceeding RM100,000 to exceeding RM400,000. He said the current maximum tax rate at 26 per cent would be reduced to 24 per cent, 24.5 per cent and 25 per cent. “This will result in the existing taxpayer enjoying a tax saving of at least 5.3 per cent,” he said. For the year assessment of 2015, he said, cooperative income tax rate would also be reduced by one to two percentage points.
In addition, secretarial fee and tax filing fee would be allowed as deductions, he said. Najib said for 2016, corporate income tax rate would be reduced by one percentage point from 25 per cent to 24 per cent and income tax rate for Small and Medium Enterprises (SMEs) would be reduced by one percentage point from 20 per cent to 19 per cent. Najib said to assist businesses in the successful implementation of GST, several incentives and assistance would be provided. These included the training grant of RM100 million provided to businesses for their employees to attend GST courses and financial assistance amounting to RM150 million provided to SMEs for the purchase of software.