Malaysia 2016 Budget - Highlights in Budget

Malaysia 2016 Budget - Highlights in Budget

YAB DATO’ SRI MOHD NAJIB TUN HAJI ABDUL RAZAK, Prime Minister and Minister of Finance has announced the 2016 Budget on 23 October 2015.

In compliance with the changes in 2016 Budget, these are the changes which would affect the taxpayer in term of taxation planning.

Individual

a) Increase in Spouse relief

Proposed legislation

It is propsed that the relief will be increased from RM3,000 to RM4,000

b) Tax relief for parental care

Proposed legislation

It is propsed that a parent relief will be introduced to a resident individual taxpayer where RM1,500 is given in respect of each parent.

c) Increase in relief for child below 18 years old

Proposed legislation

It is propsed that the relief will be increased from RM1,000 to RM2,000

d) Increase in relief for child above 18 years oldor above and studying at tertiary

    level

Proposed legislation

It is propsed that the relief will be increased from RM6,000 to RM8,000

e) Increase in relief for tertiary education

 Proposed legislation

It is propsed that the relief will be increased from RM5,000 to RM7,000

f) Tax relief on employee's contribution to SOCSO

Proposed legislation

It is propsed that a relief  of RM250 per year will be given for contribution made to SOCSO

Company

a) New paragarph 16B of Schedule 3 for Industrial Building Allowance

Proposed legislation

It is proposed that a person is no longer entitled to claim IBA if the building or part of the building thereof is used by that person for the purpose of letting to another person

b) Redefinition of Small and Medium Enterprise for Special Allowances for Small

    Value Assets

Proposed legislation

It is proposed that a SME is redefined as a company which is resident and incorporated in Malaysia

c) Deductibility of Goods and Services Tax

Proposed legislation

Any amount paid or to be paid in respect of GST as input tax by a person is not allowed as a deduction under the new subsection 39(1) (o) of ITA 1967, if:

i) he is liable to be registered under the GST Act 2014 but he has failed to do so;

ii) he is entitled to the input tax credit under GST Act 2014 but has failed to claim.

Any amount of output tax paid or to be paid under the GST Act 2014 which is borned by a person who is registered or liable to be registered under the GST Act 2014 is also not allowed as a deduction under the new subsection 39(1)(p) of the ITA

d) Filing of Employer;s return (Form E) via e-filing

Proposed legislation

It is proposed that where the employer is a company, the Employer's return must be submitted by way of an electronic medium or electronic transmission

e) Penalty to a company, limited liability partnership, trust body or co-operative

    for failure to furnish correct particulars required by the Director General

Proposed legislation

It is proposed that any company, LLP, trust body, co-operative society which without reasonbale excuse fails to furnish in its tax return the correct particulars required by the DG, shall be guilty of an offence and shall, on conviction, be liable to a fine of not less than RM200 and not more than RM20,000 or to imprisonment for a term not exceeding 6 months or to both.