The Income Tax (Deduction from Remuneration) (Amendment) Rules 2023 [P.U. (A) 230/2023] (Amendment Rules) was gazetted on 31 July 2023 and came into operation on 1 August 2023.

The Amendment Rules amend the Income Tax (Deduction from Remuneration) Rules 1994 [P.U. (A) 507/1994] (Principal Rules) by substituting Table 1 in Paragraph 4(1) of the Schedule in the Principal Rules with the following table:

"Table 1: Value of P,M,R and B"

P

(RM)

M

(RM)

R

(%)

B

Catergory 1& 3

(RM)

B

Catergory 2

(RM)

5,0001 - 20,000 5,000 1 -400 -800
20,001 - 35,000 20,000 3 -250 -650
35,001 - 50,000 35,000 6 600 600
50,001 - 70,000 50,000 11 1,500 1,500
70,001 - 100,000 70,000 19 3,700 3,700
100,001 - 400,000 100,000 25 9,400 9,400
400,001 - 600,000 400,000 26 84,400 84,400
600,001 - 2,000,000 600,000 28 136,400 136,400
Exceeding 2,000,000 2,000,000 30 528,400 528,400

It is noted that the Inland Revenue Board of Malaysia (HASiL) responded on 7 July 2023 in the Joint Memorandum on Issues Arising from 2023 Budget Speech & Finance Bill 2023 (item (a) on page 10) that the new tax rates to calculate the monthly tax deduction (MTD) would come into operation on 1 June 2023. This would be by an amendment to the Principal Rules following the gazette of the Finance Act 2023 on 31 May 2023. The operational date of 1 June 2023 was also announced on HASiL’s website in June 2023.

References:

1.  Income Tax (Deduction from Remuneration) (Amendment) Rules 2023 [P.U. (A) 230/2023].

2.  HASiL’s Minutes of the Post-2023 Budget Dialogue & Responses to the Joint Memorandum on Issues Arising from 2023 Budget Speech & Finance Bill 2023 (7 July 2023).

3.  e-CTIM TECH-DT 50/2023 - HASiL Announcement - Adoption of new tax rates to calculateMonthly Tax Deduction effective from 1 June 2023.

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