EPF 8% Means Paying More Income Tax ( For High Income Group )

Assalamualaikum wbr.

I would like to share with you my colleague finding on why BN's Government very excited to implement 8% contribution to all Malaysian workers.

Please see below

English Translation :

Assume monthly basic salary is RM4000.

- If your monthly EPF contribution is 11% ( RM440 ), taxable income = RM3560, income tax payable = RM77 .

- If your monthly EPF contribution is 8% ( RM320 ), taxable income = RM3680, income tax payable = RM109 .

Conclusion : If you choose to contribute 8% , you will end up paying more income tax to the government, which will make the government richer. Finance Minister Najib said this measure is meant to boost up the slow-down market, but from this example wee see that the money does not go into the market. Instead the money goes direct into the government's pocket through the greater amount of income tax that we will have to pay. Obviously this measure does not help the market at all.

Translation in Chinese Versa

假设 薪水 RM4000 ，

- 选择 EPF 11% 也就是 RM440 ， taxable income 是 RM3560 ，所以 tax RM77
- 选择 EPF 8% 也就是 RM320 ， taxable income 是 RM3680 ，所以 tax RM109