Amendment to Income Tax Act 1967 passed to help individuals, businesses cope with challenging times

A bill to amend the Income Tax Act 1967 was passed in the Dewan Rakyat today, providing various tax reliefs for individuals and businesses to face a more challenging economic situation next year.

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Among others, a lifestyle relief was introduced where taxpayers could claim up to RM2,500 for the purchase of reading materials, computer and sports equipment.

The bill, tabled by Deputy Finance Minister Datuk Othman Aziz, also expanded the scope of lifestyle relief to include the purchase of printed daily newspapers; smartphones or tablets; Internet subscription and gymnasium membership fees.

To encourage and support women to return to work while they are still breastfeeding their infants, Othman said a new tax relief of up to RM1,000 has been introduced for the purchase of breastfeeding equipment.

Women taxpayers with children aged up to two-years-old are eligible for the tax relief which can be claimed once every two years. The amendments also include a new tax relief of up to RM1,000 for individual taxpayers who enrol their children aged up to 5 years in childcare centres or kindergartens registered with the Welfare Department or the Education Ministry.

This tax relief can only be claimed by either parent of the children. To help reduce the cost of ownership of first homes, stamp duty exemption will be given for the purchase of the first home not exceeding RM300,000. For houses between RM300,000 and RM500,000, the stamp duty is fully exempted only for the first RM300,000 of its value.

As for the withholding tax on income derived by non-residents, Othman said the term “public entertainer” would include a compere; model; circus performer; lecturer; speaker; sportsperson; an artiste or individual exercising any professional, vocation or employment of a similar nature. These also include those who use their intellectual, artistic, musical, personal or physical skills or characters in various media.

To assist the small and medium enterprises, the tax rate for them will be reduced to 18 per cent on chargeable income up to RM500,000. To further encourage arts, cultural and heritage activities in Malaysia, the limit of tax deduction for companies that sponsor such activities will also be increased up to RM700,000 per year.

The limit allowed for sponsoring foreign arts, cultural and heritage will also be increased up to RM300,000 annually. In its effort to encourage more companies to participate in the Structured Internship Programme (SIP), which entitles double deduction on expenses incurred, the incentive will be extended to three years.

Read More : http://www.nst.com.my/news/2016/11/191244/amendment-income-tax-act-1967-passed-help-individuals-businesses-cope