Tax Saving Tips From 2009 Budget

One main focus of the 2009 Malaysia Budget was on easing the people’s burdens in these times of rising inflation and a much greater focus was given to employee welfare.

If you originally thought that the Budget 2009 didn’t really benefit you directly, read below and you might be surprised to know that you can potentially save up to 4% in taxes through the changes in the Budget!

The 2009 Budget provided tax exemptions on travel allowances and other employee benefits such as interest subsidies, childcare allowances, mobile phones, staff discounts and others with immediate effect.

These used to be lumped together with the employees annual salary and taxed at the end of the year. That way, employees never fully benefitted from these allowances as a travel allowance of RM2,400 per annum will not be fully RM2,400 as there is some tax applied on it.

Based on Ernst & Young’s analysis, employees can stand to gain up to 4% tax savings in the Tax Year of Assessment 2008 through this tax exemption.

KUALA LUMPUR: Employees in general can save about 4% in tax payment on their income pursuant to the tabling of the Budget 2009 last week, said Ernst & Young Tax Consultants Sdn Bhd executive director Tan Lay Keng.

“It has an effect on the overall saving of approximately 4% for the employees in general after taken into consideration all the allowances and incentives proposed for budget 2009″, she said.

Hence, if your boss has rejected your requests for a salary increment, it is a good time to ask him or her to make it up to you in the form of allowances instead!