The 2014 Malaysian budget is said to have its objectives. Some of these objectives can be listed as fostering economic growth, reducing fiscal deficit and promoting the well-being of the nation and its people. Every year in September or October, the Finance Minister who is also the Prime Minister, Najib Tun Razak. Presents a report on the Malaysian finance position as well as certain fiscal policies that the government intends to put into action in the coming year. These changes include tax changes for the year 2014.
In the Malaysian Budget 2014, there were several changes in the income tax rates and policies which could be acknowledged. One major change that would be taking place in the year 2015 would be the introduction of goods and service tax(GST). The date of implementation is 1 April and the GST will be at a fixed rate of 6% in Malaysia.
Besides that, there is a decrease in personal income tax rates by 1%-3% across bands. This change would take place in the year 2015 onwards. This influence means that households earning around RM4000 a month and below will pay no income tax at all. This occurs in anticipation of the implementation of GST. The proposal aims to shrink the cost of living for resident individuals alongside increasing their disposable income. This lowered tax rate might have been initiated also to embolden more spending as there would be more disposable income. With this people will work harder and eventually productivity will increase to produce more products and services which will be good for the economy as a whole.
Furthermore , now there is an addition of two new personal income tax bands to the list. The two top earners are now at RM100,001-RM250,000 and RM250,001-RM400,000. This move brings more...