NATIONAL ECONOMIC RECOVERY PLAN – INCOME TAX AND RPGT

Proposed:

i.      Further tax deduction for employers which implement FWAs or undertake enhancement of their existing FWAs

(Effective from 01.07.2020)

ii.     Income tax exemption of up to RM5,000 for employees who receive benefits in the form of mobile phone, laptop or tablet

(Effective from 01.07.2020) 

iii.     Special individual income tax relief up to RM2,500 on purchase of mobile phone, notebook and tablet

(Effective from 01.06.2020)

Current:

Relief of RM2,000 is given for individual taxpayers who enroll their children up to 6 years of age, in childcare centres or kindergartens registered with the Department of Social Welfare or the Ministry of Education

Proposed:

Tax relief for fee paid to childcare be increased from RM2,000 to RM3,000

(Effective from Y/As 2020 & 2021)

Current:

Tax deduction be given on provision of Personal Protective Equipment (PPE) to employees.  Whereas, expenses for non-disposable PPE products can be claimed as capital allowance.

Proposed:

i.      Extension of scope of allowable expenses to include Covid-19 screening test;

ii.     Claimable of capital allowance for Personal Protective Equipment (PPE) and thermal scanners.

Current:

Cost of renovating and refurbishing business premises of up to RM300,000 will be given tax deduction limited to qualifying expenditures incurred from 01.03.2020 to 31.12.2020.

Proposed:

The above special tax deduction be extended to 31.12.2021.

Current:

ACA (20% initial allowance and 40% annual allowance) will be given on qualifying capital expenditure for the purchase of machinery and equipment (including ICT equipment) incurred from 01.03.2020 to 31.12.2020

Proposed:

The above ACA be extended to 31.12.2021.

Current:

Minimum rental reduction of 30% of original monthly rental charged to the SME tenant will be given a special deduction for the month of April 2020 to June 2020.

Proposed:

The above special deduction be extended to 30.09.2020.

Proposed:

Income tax rebate up to RM20,000 per year for 3 years of assessment be given to newly established SME between 01.07.2020 to 31.12.2021.

Proposed:

Current:

Businesses in the tourism industry such as travel agencies, hoteliers and airlines are given a deferment of their monthly tax instalments for six (6) months from 01.04.2020 to 30.09.2020.

Proposed:

The deferment of monthly tax instalments will be deferred until 31.12.2020

Current:

Special income tax relief of up to RM1,000 will be provided to individuals for expenses on domestic tourism made from 01.03.2020 to 31.08.2020, but limited to:

i)              Accommodation expenses at premises registered with Ministry of Tourism, Arts and Culture Malaysia (MOTAC); and

ii)             Entrance fees to tourist attractions.

Proposed:

The above special income tax relief will be extended to 31.12.2021.

Proposed:

RPGT exemption be given to individuals who are Malaysian citizens and dispose their residential homes from 01.06.2020 to 31.12.2021.  This exemption is limited to the disposal of 3 units of residential homes per individual.