EMPLOYEES’ contribution to the Employees Provident Fund will be reduced by three percentage points from March this year.
The move is one of 11 key measures in the revised Budget 2016 announced by the Malayasian Premier Najib Rzak on Thursday.
Mr Najib, who is also finance minister, said employees currently contribute 11pc of their monthly salaries to EPF. The latest measure will automatically reduce this ratio to 8pc.However, the percentage of employers’ contribution remains the same, said Najib.
“This measure is expected to increase private consumption expenditure by 8bn ringgit ($1.88bn) a year,” he said.
Mr Najib also announced that the government would provide a special tax relief of 2,000 ringgit to individual taxpayers with a monthly income of 8,000 ringgit and below.It will apply to the year of assessment for 2015.
“Although the government will forego revenue of 350m ringgit, it will provide individual tax savings of up to 475 ringgit, which will benefit some 2m taxpayers,” he said.
Giving emphasis on providing affordable homes, Najib announced that all new housing projects priced up to 300,000 ringgit would be sold only to first-time house buyers.
He added that the government would organise Integrated House Ownership Expo roadshows offering homes under the national housing schemes. More than 100,000 housing units are expected to be offered under this new programme.