YAB Dato' Sri Mohd Najib Tun Haji Abdul Razak, Prime Minister and Minister of Finance tabled the National Budget 2015 on Friday, the 10th October 2014 in Parliament.The Budget theme for 2015 is “Accelerating Growth, Ensuring Fiscal Sustainability and Prospering the people (Rakyat)” .
This is an important event seeing that Budget 2015 is crucial as it is the final budget under the 10th Malaysia Plan. It will provide allocations for the remaining programmes and projects under the plan and will help determine a smooth transition into the 11th Malaysia Plan, which in turn will contribute to the final push in transforming the country into an advanced and high income nation by 2020.
Malaysia’s 56th Budget outlines seven main strategies as follows:
• Strengthening Economic Growth;
• Enhancing Fiscal Governance;
• Developing Human Capital and Entrepreneurship;
• Advancing Bumiputra Agenda;
• Upholding Role of Women;
• Developing National Youth Transformation Programme; and
• Prioritising Well-Being of the Rakyat.
The following are 2015 Budget Highlights:
1. Reduction of individual income tax rates of 1% to 3% across various income bands from Year of Assessment (“YA”) 2015. The maximum individual tax rate is reduced from 26% to 25%, with the 25% rate applying to chargeable income in excess of RM400,000.
2. Reduction of the standard corporate tax rate from 25% to 24%. For small and medium enterprises, the tax rate for chargeable income of up to RM500,000 is proposed to be reduced to 19%, with the remaining chargeable income subject to tax at 24%. These changes will be effective from YA 2016.
3. The due date for monthly installments for income tax and petroleum income tax has been revised to the 15th day of the calendar month.
4. The time limit for the Director General to raise an assessment or additional assessment for income tax and petroleum income tax has been increased to 7 years for non arm’s length transactions entered into between associated persons.
5. The maximum penalty upon conviction shall be increased from RM2,000 to RM20,000 for the failure to furnish a return or give notice of chargeability, or attempting to leave Malaysia without payment of tax, amongst others.
6. Tax deductions are given on training expenses incurred by companies for their employees to obtain industry recognized certifications and professional qualifications from approved training programmes.
7. Double deductions are given to companies awarding scholarships and implementing structured internship programmes for eligible Malaysian students pursuing vocational and technical courses.
8. 100% income tax exemption for 3 years is given on profits earned by individual investors from certain investments made through the Investment Account Platform (“IAP”), a new funding model to finance projects and venture companies based on Syariah principles.
9. Tax exemption equivalent to a100% investment tax allowance for 5 years is given to companies engaging in expansion, modernization or refurbishment where such companies provide healthcare facilities to qualified healthcare travellers who make up at least 5% of their total patients.
10. Additional items have been identified as not being subject to Goods and Services Tax (“GST”).
11. Retail sale of petrol (RON 95), diesel and Liquefied Petroleum Gas (“LPG”) are given relief from payment of GST.
12. Price watch teams will be jointly set up with Consumer Associations. The GST Enforcement Unit, Price Monitoring Unit and Consumer Squads will be strengthened.
13. 50% stamp duty exemption on instruments of transfer and loan agreements executed by Malaysians (married youths aged between 25 and 40 years) for the purchase of their first residential property has been extended to 31 December 2016 for properties not exceeding RM500,000.
14. For real property gains tax purposes, where the consideration for a chargeable asset consists wholly or partly of money, the purchaser is required to withhold and remit to the Inland Revenue Board (IRB) the whole of that money or 3% of the total value of the consideration, whichever is lower.
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