Budget 2014 highlights

GST implementation announced

Prime Minister Datuk Seri Najib Tun Razak announced GST at 6% to be introduced from 1st April 2015, with the existing sales and services tax to be abolished.

Some of the items excluded from GST include:

• Government services
• Public transport
• Food items such as cooking oil, spices, salted fish, rice, flour.
• Electricity for domestic use and piped water
• Sale and purchase or rental of residential properties

To assist businesses prepare for GST, the government has proposed:

• Accelerated Capital Allowance until year of assessment 2016 for purchase of ICT equipment and software
• Tax deduction for expenses incurred relating to GST training for years of assessment 2014 and 2015.

Personal tax rates

• Individual tax rates reduced 1% to 3%.
• Chargeable income subject to maximum rate to be increased from exceeding RM100,000 to exceeding RM400,000.
• Tax bracket reduced from 26% to 24%, 24.5% and 25%.
• Individuals who pay tax through PCB deductions no longer required to file tax returns. PCB considered final tax.
• Special tax relief of RM2,000.00 for tax payers with monthly income of up to RM8,000.00 in 2013.

Company tax rates

Corporate tax rates reduced by 1% to 24%

SME tax rate reduced from 20% to 19% effective year of assessment 2016