The new year is around the corner, set to mark new beginnings. While you work on that list of New Year’s resolutions, we’ve worked on a list items, taxes and initiatives that may affect your budget, lifestyle, purchasing decisions and work choices next year. Read on.
1. Goods and Services Tax (GST)
The three letters that you read and hear about most these days – G,S,T – stands for Goods and Services Tax. Come April, the GST is set to replace the Sales and Service Tax (SST), affecting everyone – sundry shop owners, restaurants and even your car mechanic. At the moment, when you buy a drink or meal at a restaurant, you typically pay 6 per cent to 10 per cent more than the product or service’s price; this is the SST (Sales and Services Tax). This means, you’re likely to pay two types of taxes, one on the drink you buy, and a service tax for dining in restaurant. Most of the time, the SST is included in the price of the product and you often don’t know how much it is. The GST is designed to tax the customer based on how much he or she spends. So technically, the more you consume, the more tax you will have to pay. But, take note, these items won’t be hit by the GST:
a. Local and imported fruits
b. White bread and wholemeal bread
c. Coffee powder, tea dust and cocoa powder
d. Yellow mee, kuey teow, laksa and meehoon
e. Rice, sugar, vegetables, fish, meat and cooking oil
f. Petrol, public transport, electricity supply, education and health services.
g. Close to 3,000 medicine brands to treat heart failure, diabetes, hypertension, cancer and fertility treatment
h. Newspapers, reading materials such as children’s colouring books, exercise and reference books, text books, dictionaries and religious books
Full list, here.
2. BRIM – More cash for you
Good news! An acronym that will bring a smile to Malaysians. There is more money to be handed out in BRIM, a short form of Bantuan Rakyat 1 Malaysia or the 1 Malaysia Citizens Aid initiative.
Households with an income of RM3,000 and below will receive RM950, up from the previous RM300 aid, while those in the RM3,000 to RM4,000 income bracket can enjoy an ‘ang pow’ of RM750, up from the previous amount of RM450. For single individuals aged 21 and above, earning an income not exceeding RM2,000 a month, they can collect RM350.
3. Buying a house
Couples shopping around for a first home can apply for a loan under the Youth Housing Scheme. The pair must be between 25 and 40 years of age and have their combined income of not more than RM10,000.
The property’s price tag itself should not go over RM500,000 and take note, that the maximum loan period you can apply for is 35 years. This arrangement is being done by the government, in partnership with Bank Simpanan Nasional, the Employee’s Provident Fund (EPF) and Cagamas, the national mortgage corporation.
A 50 per cent stamp duty exemption on agreements will also be given to those buying a home, a waiver that will go on until the end of 2016.
4. Civil servants enjoy bonus and housing help
Again more cash handouts! Civil servants will receive a half-month bonus with a minimum payment of RM500 in January, while government pensioners will pocket RM250.
Starting next year, public servants should also find it easier to obtain financing to buy a house.
The government is raising the the minimum eligibility for housing loans from RM80,000 to RM120,000 and the maximum loan amount to RM600,000, up from RM450,000. The processing fee of RM100 is also waived (yay!) when civil servants send in an application to get housing loan.
5. Back to School
‘Pocket money’ of RM100 will be given to all primary and secondary school students. Each. Just don’t spend it all at once. A simple calculation brings that amount to RM540million, as all 5.4 million students in Malaysia will benefit from this allowance.
The 1Malaysia Book Voucher Programme will continue next year, so students will receive an additional RM250 to buy reference books and instruments needed for their schoolwork.
6. Trains and buses
Commuting in congested Klang Valley is usually a nightmare, but with 2015 initiatives the public transport system is (hopefully) set to improve. An intercity bus service from Rawang, Klang and Seremban will be provided to cater to those working in the city centre but are living outside of Kuala Lumpur.
Monthly fares will be discounted at 30%, so you can save while enjoying better connectivity into the city. Further north, if you’re a regular commuter from Penang to Ipoh, you can expect to enjoy speedier journey as Malaysia’s Electric Train Service will be extended from Butterworth to Ipoh in April.
7. Helping the disabled and disadvantaged
Those who are disabled and working will receive RM350 starting next year as allowance, while those who are unemployed are not left out, as their allowance is raised to RM200.
A higher tax relief is offered for families with disabled children in January, raised from RM5,000 to RM6,000, while the same hike is applied to buying equipment for the taxpayer, partners and family members with disabilities.
Other initaitves planned are raising food allowances and building more Senior Citizen’s Activity Centres, while expanding the Senior Citizens Care Services Programme that provides free transport to hospitals.
8. Pay less income tax
You’re looking to pay less income tax starting next year. If you’re working in Malaysia as an individual, income tax rates will be cut by 1 to 3 percentage points.
This reduction will affect some 300,000 taxpayers, who will no longer have to pay income tax in 2015. Other measures that the government is planning for 2015 is to restructure the individual income tax so the chargeable income subject to the maximum rate will be raised to exceeding RM400,000, while cutting the maximum tax rate of 26% to 24%, 24.5% and 25%.
This means, you’ll be enjoying a tax savings of over 5%. Hurrah!
9. Malaysia’s the place to be for startups
The setting up of MaGic is aimed at creating a more vibrant environment for budding entrpreneurs keen to get their businesses running. Malaysia wants to attract more foreign startups, so it is using the carrot and stick option, by offering an incentive of a one year work passes for startups with a paid up capital of RM75,000 to invest in the country.
10. Girl power
Empowering women and supporting women’s career and family needs are always a priority for Malaysia, as the government intends to train over 100 women to fill up board positions in government-linked companies as well as within the private sector.
Women who are at home can benefit from the incentives under the 1Malaysia Support for Housewife programme, while Talent Corp is supporting those who are returning to work under the Women Career Comeback Programme. Meanwhile, Indian women entrepreneurs can take advantage of the RM30 million allocated through microcredit institution Amanah Ikhtiar Malaysia (AIM). The Government will improve the Child Care Leave eligibility, and will extend the perk to female civil servants who have step children, legally adopted children and children with disabilities. Details here.
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