Disposable Income Increased With Tax Reliefs
Government initiatives to increase the nation’s disposable income have proved fruitful with the fallen tax rate.
It was reported Malaysians saw a lower personal income tax burden as tax rates have fallen from 28% in 2008 to 24% currently. Additionally, corporate tax rates have also reduced from 27% in 2008 to 24% now.
The administration had made moves, such as raising the minimum threshold above RM4,000, to ensure the tax system will not relapse to its previous state.
Furthermore, a lowered tax rate by 2% for incomes between RM20,000 and RM70,000 was announced during Budget 2018, which ensures those who earning outside of that income bracket will be excluded from taxes.
With this, over 260,000 will be exempted from paying tax, while disposable income has increased from RM300 to RM1,000. This translated into a total of RM1.5billion for the predominately middle-income population.
Benefits such as tax relief to encourage Malaysians to save included the RM6,000 relief available for National Education Savings Scheme (SS1PM) net savings for the next three years.
Other benefits included the introduction of a RM2,500 lifestyle tax for newspapers, smartphones, tablets, internet subscriptions and gym memberships.