Budget 2014: What’s new?
The Prime Minister and Finance Minister, Datuk Seri Najib Tun Razak has just tabled the Budget 2014 and here are some of the major changes that will affect you and your pocket.
Goods and Services Tax (GST)
GST will be implemented on April 1, 2015 at 6% to replace the Sales and Services Tax (SST). To ensure smooth transition for the lower-income group, the government will be giving BR1M recipients an additional RM300 one-off cash assistance.
Exemptions include essential items, such as food items like sugar, rice, flour, lentils, salt, herbs, and even salted fish, piped water, public transportation and the first 200 units of electricity per month for domestic users. Other exemptions include issuance of passports, licenses, healthcare and education services.
Personal income tax will be reduced by 1% to 3% for each tax to increase their disposable income. This means families with monthly income of RM4,000 will no longer be liable for tax.
The maximum rate for income tax will also be increased from exceeding RM100,000 to exceeding RM400,000 with the tax rate for those earning more than RM100,000 annually reduced from 26% to 24%, 24.5% and 25%.
Not forgetting businesses, to offset the implementation of GST, corporate income tax will also be reduced by 1%, from 25% to 24%. And SME income tax will be reduced by 1% from 20% to 19%, from the year of assessment 2016.
Various tax reliefs and deductions will also be given to businesses in relation to GST training and tools needed for the companies.
Sugar to cost more
The government has cut sugar subsidy to 0.34 sen per kilogramme, in its bid to discourage the rakyat’s high sugar intake due to the high number of diabetes sufferers in the country.
Households with monthly income of RM3,000 and below will receive RM650, an increase of RM150 (30%), while singles aged 21 and above with who earn less than RM2,000 will get RM300, an increase of 20% from RM250.
In addressing the cost of living among the middle-income group, BR1M will be extended to households with a monthly income of between RM3,000 and RM4,000.
Will you be better or worse off? Find out using our Budget Calculator.
To understand the key highlights of Budget 2014, check out our infographic.