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From BizWeek:
Another move that may not go down so well with some is the introduction of the single-tier tax system on profits and dividends, as this would be disadvantageous to those who are in the below 26% tax bracket as well as to those who currently do not pay any income taxes, such as the pensioners and retirees.
This is because this category of taxpayers would effectively have to pay the difference between their current tax rates and the corporate tax rate of 26% from next year onwards. Presently, such individuals are able to claim for refunds from the Inland Revenue Board.
Take, for example, a person who receives a total of RM1,000 in gross dividends in 2008 from his investments but is currently only in the 20% marginal tax rate band. The net dividend that he receives would be RM740 (RM1,000 – RM260, the latter being the 26% corporate tax). Under the present system, he would be able to claim a refund of RM60 (RM260 – RM200) but under the proposed single-tier tax system, he would not be entitled to any refunds.
Comment : omg, i suppose can claimed the refund if i am under 26 marginal tax rate band, but now no more. Thanks government.
Maybe it times to consider invest in other country..
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