I guess, you might have read this somewhere. I got an email regarding the government to boost Malaysia economic. One of the initiative is to reduce the employee contribution in EPF from 11% to 8%. If you choose to opt for 11% deduction you need to fill up a form from EPF.
Anyway, back to the email and see how this will affect you and the government/
Assume monthly basic salary is RM4000.
- If your monthly EPF contribution is 11% ( RM440 ), taxable income = RM3560, income tax payable = RM77.
- If your monthly EPF contribution is 8% ( RM320 ), taxable income = RM3680, income tax payable = RM109.
Conclusion : If you choose to contribute 8%, you will end up paying more income tax to the government, which will make the government richer. Finance Minister Najib said this measure is meant to boost up the slow-down market, but from this example wee see that the money does not go into the market. Instead the money goes direct into the government’s pocket through the greater amount of income tax that we will have to pay.
Obviously this measure does not help the market at all. Do we still want this kind of government that doesn’t have the best interest of the people in mind?
My 2cents :
I would opt for 11% of course. Better that money goes to EPF. How about you ?