With the negative impact of the pandemic on the Malaysian market, the Government has consider providing temporary tax breaks to individual taxpayers who have suffered salary reductions or job losses. These could be in the form of tax rebates designed specifically to cater to the impacted individual taxpayers. Even if the individual taxpayers may have been re-employed during the year, the income lost during the months of unemployment would have had a significant financial impact.

Thus, the government has agreed to lower the rate for personal tax rates 2021 / income tax 2021 by one percentage point for those earning taxable wages from RM50,001 to RM70,000 which is expected to benefit 1.4 million taxpayers.

For a period of two assessment years, the income tax 2021 exemption limit for compensation paid upon job loss will be increased from RM10,000 to RM20,000 for every year of service completed to reduce the burden of the people who are affected by the pandemic.

This tax waiver will allow them to recoup and strengthen their internal finances to rebuild their businesses. With tax exemptions, the employees as consumers, will have higher disposable income.