BUDGET 2022, TAX RELIEF THAT MIGHT BE BENEFITTING YOU
In October, our finance minister Tengku Datuk Seri Zafrul Abdul Aziz had presented the National Budget for 2022 and had proposed a range of programs that aims to help our country to overcome the economic challenges because of the Covid-19 pandemic. And of course, among the initiatives, they are several initiatives are related to income tax.
And it is important for us to know what are the new tax reliefs and the previous short-term ones that have been extended into the year 2022. This will help us to get maximum tax refunds and ease the cash flow issues that we might have before or after paying tax.
So, What are the New or Extended Tax Reliefs??
1. Tax relief for self-funded Covid-19 booster shots and related costs.
The government had proposed to provide individual tax relief as well as a tax deduction to employers on costs that is related to self-funded Covid-19 booster vaccines. In other words, if you are paying for your booster dose, you can claim that amount for tax relief.
2. Tax relief for health examination expenses expanded to cover mental health services.
In order to provide better mental health support for the people, income tax relief for a medical check-up which is currently set at RM1000 has been expanded to include mental health services and covers mental health check-ups or consultation services under registered psychiatrists, clinical psychologist, and counselors.
3. Tax relief for the purchase of phones, computers, and tablets will be extended.
This ongoing tax relief of RM2500 will be extended for the 2nd time from 31 December 2021 to 31 December 2022. It was introduced as a way to assist Malaysians in adopting the work from home culture due to MCO. It was supposed to last until December 2020 but continued to extend until the end of 2021 under the Permai Stimulus Package. This special tax relief is provided on top of the existing tax relief of lifestyle purchases of RM2,500.
4. Tax relief on upskilling and self-enhancement course Fees.
Our government is encouraging us to upskills and pick up new skills to venture into new fields and has proposed to increase the tax relief limit for self-enhancement and upskilling courses from RM1,000 to RM2,000 and extend until 2023.
5. Expansion of Tax Relief on EPF Contributions
Tax relief on EPF contributions will be expanded to include voluntary contributors (self-employed) including pensionable government servants. And is up to RM4,000.
6. Expansion of Tax Relief on SOCSO Contributions
Currently, private sector employees are provided with tax relief of up to RM250 for contributing to the social security protection scheme that is regulated by the Social Security Organisation (SOCSO). The government has proposed to increase the limit of this tax relief from RM250 to RM350, as well as expand the scope to include employees’ contributions through the Employment Insurance System (EIS) as well.
7. Higher tax relief for childcare centers and kindergartens fees
For parents with children, you are originally allowed to claim up to RM2,000. But under the PENJANA Stimulus package, this limit has increased to RM3,000 and extended until the end of 2022. But recently announce under budget 2022, it is proposed to be extended for another two more years until 2023. Hope this will ease parents' financial burden in providing early education for children.
8. Tax exemption on prize money from e-sports tournaments
This is a form of recognition for local e-sports athletes, government has proposed to exempt the tax for the prize money won from recognized e-sports tournaments.
9. Tax relief for electric vehicles ownership.
Aside from providing import duty, excise duty, as well as sales and road tax exemptions for EV owners, the government has also proposed to offer income tax reliefs of up to RM2,500 for the purchase and installation, rental, and hire-purchase of EV charging facilities. The tax relief will also apply to payments of EV charging facility subscription fees.
10. Tax relief for deferred annuity extended
Malaysians were originally allowed to tap into annual income tax relief of up to RM3,000 on the premium payment for deferred annuity and contributions to the PRS, provided up to a year of assessment (YA) 2021. Under Budget 2021, this benefit was extended for PRS contributions until YA2025, but not for a deferred annuity.
This year, under Budget 2022, the government has proposed to extend the tax relief for deferred annuity premium payments for another four years.
What do you think? Is it good enough to help us save some cash in 2022? Let us know.