A friend of mine sent me a email showing how if you are contributing 8% that would effectively mean you pay more tax! This may apply for those who’s earnings are above a certain amount. Have a look at the calculation below :
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 through the greater amount of income tax that we will have to pay every month. Obviously this measure does not seems to help the market at all.
So you still lazy to fill up that form??
From the Shelves of Delirium
Digging up the files…
I still think the policy should be for people to opt out of the 11% as opposed to opt to continue contributing that amount. Grr …
I totally agree with you man! It should definitely be that way!
I just submitted my form yesterday and yeah…totally agree with Niki…..because so far most people just want to continue the current rate which is 11%
Damn la… more money to them as usual.
What happens to during our yearly submittion?
The above statement is only half truth. Go to my recent blog, Debunking: EPF 8% Means Paying More Income Tax!!??? for more info.
[...] knows more than me of the mechanics of how individual tax is concerned dropped me a comment on my previous posting saying that the emails being floating are half [...]