Budget 2022: Statutory Contribution & New Tax Initiatives
Payroll Malaysia 2022 changes and updates
Payroll Malaysia 2022 changes and updates
EPF Contribution Rate
The Finance minister has announce in Budget 2022 that the employee EPF contribution rate will remain at the reduced rate of 9%. This statutory contribution rate will be kept at 9% until June 2022. This is to increase the cash flow in the hands of the citizens. After said date, the minimum statutory contribution rate will return to 11%. Employee’s who wish to maintain their contribution rate at 11% may notify their employer and the employer may submit the Borang 17A Khas to KWSP.
Increase in the monthly salary ceiling for SOCSO and EIS
The government has increased the insured monthly salary ceiling from RM 4,000 to RM5,000 to widen the social security coverage of nearly nine million workers in Malaysia. Along with the increase insured amount, tax relief limit has increased from RM250 to RM350. The scope of relief for SOCSO contributions will be covered through Employment Insurance System (EIS).
New Financing Initiatives
- Wage Subsidy Programme
The wage subsidy initiative will continue in 2022 for businesses in the tourism sector. RM 600 million has been allocated for this initiative that will benefit 26,000 employers and 330,000 employees.
- Business Tax Related Initiatives
- Government has extended income tax deductions relating to premise renewal and renovation costs of up to RM300,000 until December 2022.
- Micro SMEs, can postpone their tax payments for 6 months until June 2022. Revisions on the estimation of income tax payable can be made until October 31st 2022. Along with that, RM1.8 billion will be invested in micro credit schemes through Bank Rakyat, Bank Simpanan Nasional (BSN), Agrobank, and TEKUN.
- Rental discounts and special tax deductions will be given until June 2022. A tax deduction of at least 30% of the original rental rate will be given.
- Reset Scheme for SMEs. Bank Negara Malaysia will provide a RM1 billion Business Recapitalization Fund. Targeted Relief and Recovery Facility under BNM has increased by RM2 million.
- Income Tax Reliefs
- Government has extended income tax deductions relating to premise renewal and renovation costs of up to RM300,000 until December 2022.
- Micro SMEs, can postpone their tax payments for 6 months until June 2022. Revisions on the estimation of income tax payable can be made until October 31st 2022. Along with that, RM1.8 billion will be invested in micro credit schemes through Bank Rakyat, Bank Simpanan Nasional (BSN), Agrobank, and TEKUN.
- Rental discounts and special tax deductions will be given until June 2022. A tax deduction of at least 30% of the original rental rate will be given.
- Reset Scheme for SMEs. Bank Negara Malaysia will provide a RM1 billion Business Recapitalization Fund. Targeted Relief and Recovery Facility under BNM has increased by RM2 million.
- RGP TAX / Real Property Gains Tax Exemption
- RPGT will not be imposed on individual citizens, permanent residents and foreigners from the 6th year onwards.
- RPGT rate for property disposal after the 6th year onwards will be reduced from 5% and 10% and 0% starting from 1 January 2022.
- SST exemption for purchase of new vehicles
This SST exemption will last until 30 June 2022
- 100% exemption for locally assembled CKD vehicles
- 50% for fully imported CBU vehicles.
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