Budget 2024 and Your Personal Finance
Budget 2024 has been announced and as usual, we’re here to highlight how it can affect you.
First, let’s look at the changes that may affect our day-to-day:
The big one is that the Service tax rate is increasing from 6% to 8%, except for food & beverage or telecommunications services. This means that generally, your food consumption and your internet/phone bills should remain the same, but things like your shopping and other expenses should be expected to increase.
The tax on sugary drinks, also known as the ‘sugar tax’ is being increased from 40sen to 50sen per litre. If you enjoy sweet drinks, you may see some of your favourite drinks go up in price.
The High Value Goods or ‘Luxury’ Tax is finally being introduced at a rate of 5% to 10% tax on specific items such as jewellery and watches. We will need to wait for more details on what items count and how much the tax will be, but we expect that will depend on the prices.
Next, let’s look at changes to Tax Reliefs
The lifestyle tax relief of RM2,500 will now include fees for self-skills enhancement courses but will NO longer allow sports equipment and gym fees.
However, this will be replaced by a separate special tax relief of up to RM1,000. This includes your gym membership, registration for sports competitions or sports facilities as well as purchase of equipment. Remember however that the definition of equipment depends on the Sports Development Act 1997, which means things like football boots, running shoes, and swimsuits, for example are classified as ‘ATTIRE’ and cannot be claimed.
tax relief for medical expenses for yourself, spouse, and child has been expanded to include dental examination and treatments, limited to RM1000. This is great as it was very strange that dental was not included in medical expenses.
As for the tax relief for medical treatment for parents, it is also expanded to include full medical checkup for parents, limited to 1000. Previously it only included treatment, special needs, and care.
If you are someone who owns or wants to own an Electric Vehicle or EV, the charging facilities relief has been extended to 2027. This relief of up to RM2,500 per year applies on the cost of EV charging facilities, such as installation, purchase, rental, or subscription. If you were concerned about the cost of EV charging, this could help your decision as you will get another 4 years of relief.
Finally, if you have a PTPTN balance, there is a 10% discount on full repayments or payments of at least 50% of the remaining balance. There is also a 15% discount if you repay via salary deduction. If you still have balance on your PTPTN, it may be good to take advantage of these discounts.
That’s all for now. These are just the highlights of what we feel may affect us as individuals. If you have questions or would like more details on any of the points mentioned, make sure to comment!