Raising tax on higher-income group a bold move, says analyst

Putrajaya's move in Budget 2016 to impose more tax on the higher-income group is a bold one, said Yeo Eng Ping, partner and tax leader at Ernst & Young Malaysia. She said this was rather bold considering it came immediately after the decrease in personal income tax rates in last year's budget together with the introduction of the goods and services tax. "Not surprisingly, high-income earners have been called to pay more tax. We have observed similar developments in other countries such as Singapore and Japan," she said in a statement. Prime Minister Datuk Seri Najib Razak, when tabling Budget 2016 yesterday, announced that taxable income band for resident individuals of between RM600,000 and RM1 million be increased from 25% to 26%, from assessment year 2016. The tax rate will be increased from 25% to 28 per cent for the income bracket above RM1 million. Yeo said the budget also paid attention to the middle- and low-income groups, through initiatives such as the enhancement of various personal reliefs and the expansion of GST zero-rated list to include, among others, more essential food items. For corporates, she said Budget 2016 did not try to introduce a plethora of incentives. She also said the budget underlined consistent measures to ensure the country continued to develop its infrastructure and promote connectivity to support economic expansion.  – Bernama, October 24, 2015.]]>