Sunday, April 14th, 2019
MUMBAI, April 14 — India’s beleaguered Jet Airways was staring at a fresh crisis today as hundreds of pilots and other top staff threatened to go on strike over unpaid salaries. The airline, which has debts of more than US$1 billion, also…
KUALA LUMPUR: Tax season may be one of the most stressful times for taxpayers, especially when there are changes to the tax system, but planning ahead and equipping oneself with knowledge is key to avoiding mistakes when the time comes to file income tax.
“My biggest tip for planning ahead is to go through the reliefs and see what changes are there from year to year. You cannot just assume things remain static year on year. For example, for Year of Assessment 2019, for the first time ever, they have reduced the effective relief for EPF (Employees Provident Fund) alone. But the combined EPF and life insurance relief has increased actually, to RM7,000,“ said RinggitPlus CEO Liew Ooi Hann (pix).
“This sounds very little but it affects a very large segment of the population, specifically the segment of the population who previously had been enjoying the full EPF tax relief but have no life insurance. If you earn above RM3,000 a month and you don’t have life insurance, you are actually slightly worse off this year than last year. But for people who do have life insurance, when combined with EPF they can maximise, the deductions are actually more,“ he told SunBiz in an interview.
Taxpayers should also look at ways to improve the way they are doing things for example, using the National Education Savings Scheme (SSPN) instead of a savings account or fixed deposit to save up for children’s education.
“Consider doing it in SSPN because in addition to getting a reasonable rate, you also get tax relief. If you’re investing in mutual fund, unit trust, you can do the same thing with the same provider but in a PRS scheme. So, switch to PRS. If you are already with an asset manager, most asset managers have a PRS version of the same investment,“ he said.
According to Liew, soft copies of receipts are acceptable thus he recommends taking photos of receipts so that a digital record is available if the receipts are misplaced.
Lee Hishammuddin Allen & Gledhill (LHAG) partner S. Saravana Kumar said the most important aspect of tax planning and preparation for YA2019 is knowledge, and staying up to date on tax matters is necessary to ensure tax compliance and avoid missing out on any available tax reliefs and rebates.
“One of the tax reliefs is an allowance of up to RM2,500 for lifestyle expenses, which includes purchasing reading materials, gadgets, gym memberships and internet subscription. Further, individuals may also claim for, among others,
insurance schemes, medical expenses and own education fee,“ he said.
Another aspect of good tax preparation and planning is good bookkeeping. Saravana advises taxpayers to keep records of relevant documents such as accounts, receipts and invoices as these are required as proof of tax reliefs claimed. Such documents should be kept for at least seven years.
BERLIN, April 14 — Daimler confirmed today it was facing a regulatory probe after a report said German authorities have uncovered a previously unknown type of pollution trickery software allegedly installed by the car giant in some of its…
PETALING JAYA: An extensive investigation into the causes of the explosion and fire incident at the Refinery and Petrochemical Integrated Development (Rapid) project in Pengerang is expected to be launched, which could delay the commencement of petrochemical production for Petronas Chemicals Group Bhd’s (PetChem).
“If the Rapid investigations defer production next year, we expect a six-month delay to cause PetChem’s FY20 earnings to slightly decline by 3%, assuming product prices are stable. For now, we maintain our forecasts pending further clarity from management,“ AmInvestment Bank said in a report.
The blast, which appears to stem from a leaking gas tank, was loud enough to be heard within a 50km radius of the project. So far, two persons have been reported to be injured in the incident.
Recall that the group’s 50%-owned Pengerang petrochemical division has reached mechanical completion of 96% with production expected to commence towards the later parts of 2HFY19. Back in 2017, PetChem has sold a 50% stake in PRPC Polymers to Saudi Aramco for RM3.8 billion (US$900 million).
PetChem’s management expects minimal contributions this year, with plant utilisation around 70% for the first three to six months which will progressively ramp up to 90% over a time frame yet to be confirmed due to the complexity and integration required with Petronas’ refinery.
“Likewise, our FY19 forecasts have not incorporated any increase in PetChem’s output given that the group has guided that average plant utilisation could remain flattish above 90%, similar to FY16–18. This is supported by five major turnaround activities this year, which will be spread out over 1QFY19 and 3QFY19, as compared with six in FY18.”
AmInvestment Bank said even though PetChem’s market guidance for Q1 FY19 was bearish, it remains sanguine given that the group’s product prices have a strong correlation to Brent crude oil prices which have risen by 37% since Dec 31, 2018 to US$71 a barrel currently.
“This will be a greater impact to the group than temporary delays in Rapid commencement as a 1% increase in average product prices will translate to a higher 3% rise in net profit.”
The research house maintained its “buy” recommendation on PetChem with an unchanged fair value of RM10.40.
The stock declined 12 sen or 1.34% to RM8.84 on 14.26 million shares done.
KUALA LUMPUR: For Year of Assessment 2018 (YA2018, Lee Hishammuddin Allen & Gledhill (LHAG) partner S. Saravana Kumar (pix) highlighted several changes and new incentives in relation to personal income tax, namely, the two percentage point reduction in income tax rates for taxpayers earning RM20,000 to RM70,000 annually. The tax rate, which previously ranged from 5% to 16%, has been reduced to 3% to 14%.
In addition, the Inland Revenue Board (IRB) launched a special voluntary disclosure programme to encourage taxpayers to voluntarily disclose income that was not declared or was underdeclared, or tax incentives that were overclaimed.
Other tax incentives for YA2018 include the tax relief of up to RM6,000 for net savings in SSPN, which has been extended for three years (up to YA2020); tax relief for women returning to work upon a career break of at least two years as of Oct 27, 2017; and 50% income tax exemption on rental income, which is effective up to YA2020.
“Taxpayers must be prudent in claiming these deductions in order to maximise the available tax incentives. However, it must be reminded that such incentives should only be claimed where relevant to avoid unnecessary tax audits being carried out by the IRB,“ said Saravana, who advises taxpayers to consult tax agents or tax solicitors if they are unsure of whether the expenses are tax deductible.
Meanwhile, Liew pointed out several key things to remember when planning for tax filing.
“The number one thing that everybody forgets is, the lowest amount that you go without having to pay tax is RM4,120 a month as a salaried worker. What a lot of people assume is that their companies will just deduct for them or not deduct for them. But the thing to remember is that, most companies follow a certain schedule which is prescribed by the government and this schedule is by nature more conservative for the income tax department. What that means is companies start deducting your salary, assuming you are a single working adult with no dependents, at RM3,000. They start auto-deducting from your salary already,“ he said.
“So, it doesn’t matter who you are, if you think you don’t have to pay, you don’t have to file this year, you’re not paying tax, think again; you were. Everyone earning between RM3,000 and RM4,000 must file. Otherwise you don’t get your money back and for this range, it can go up to RM400. There are millions of people earning RM3,000 to RM4,000 in Malaysia who assume they are not paying taxes but they are,“ he added.
He said another common mistake made when filing taxes is omission, as most people cannot remember everything they did the whole year; for example buying a new smartphone and paying for broadband internet. He recommends going through the list of tax reliefs to avoid missing out on any claimable tax reliefs.
Besides omission, Saravana said it is common for return forms to be denied by IRB due to incorrect submission of personal details. Mistakes as minor as a wrong alphabet, number or even spacing may form ground for IRB to reject the return form.
“Taxpayers are advised to check their personal details, especially name and identification or registration number, numerous times. If there has been a change in personal details, taxpayers are required to report to the IRB by submitting a copy of the relevant documents proving such change,“ he said.
TOKYO, April 14 — As optimism grows that the United States and China are nearing a trade deal, Japan kicks off its own negotiations with Washington from tomorrow, hoping to resolve some of the issues “very quickly.” US Trade Representative…
KUALA LUMPUR, April 14 — Malaysia continued to experience net foreign selling for the third consecutive week as investors shifted their asset allocation into safe havens such as bonds and money market. This was due to the bearish scenario in the…
BEIJING, April 14 — China’s economy cooled further in the first quarter, according to an AFP survey of analysts, as Beijing resorted to tried-and-tested measures to combat tepid global demand and a bruising US trade war. The world’s second…
NEW YORK, April 14 — Talk about being born with a silver spoon in your mouth: The royal baby of Prince Harry and Meghan Markle will have a particularly glittery one. And US tax authorities will be keen to know how much that utensil is worth….