25% Tax for Private Retirement Scheme (PRS) ?

Christmas is coming to town, but before that, it was also the time when many people are rushing to enroll/top up their Private Retirement Scheme (PRS). Why? Main reason is they want to enjoy the tax relief given of up to Rm3,000 per year. However, social media has over-took the whole atmosphere with the purported 25% tax on PRS. Is this true?

All I want for Christmas is Tax-Free...

Why suddenly got 25% tax? It was all started with the below video...

Anyway, some people had misunderstood the meaning and translated into such chaos in social media with more than few thousand likes and comments. Well, it seems like the respond garnered already impacting the PRS contributions for many people.

Since then, the Private Pension Administrator (PPA) which was set up to monitor and administer the whole PRS scheme, had issue a statement to clarify on this matter. Likewise, Inland Revenue Board (LHDN) also issue a statement on this matter. (Click here to view)

To summarize:

1. NO tax on PRS withdrawal when contributor reaches the official retirement age set (currently at age 55)
2. As per previous terms, 8% tax penalty will be imposed if contributor withdraw before retirement age.
3. However, the 8% tax penalty will be exempted if:
• In the event of Death;
• Permanent departure from Malaysia;
• Permanent total disablement (New addition);
• Serious disease (New addition); or
• Mental disability (New addition)

Gone are the so called bad news. Indeed, there is more good news with the 3 NEW pre-retirement withdrawal conditions. PRS contributors should feel relieve now.

Take the opportunity to invest before the closing date for respective PRS providers. You may refer to our previous article on PRS below:

• What is Private Retirement Scheme (PRS) ?
• How Private Retirement Scheme (PRS) actually works ?
• What Are the Tax Benefits for PRS ?

Bursa Malaysia's eStatement

Today, Bursa Malaysia introduced eStatement services to CDS account holders. It enables CDS account holders to receive statements and notices directly from Bursa Malaysia via email.

What's the benefits?

1. To receive CDS statements and notices efficiently and on a timely basis with NO extra cost
2. To receive CDS statements and notices directly to your personal email
3. Minimize risks of not receiving your CDS statements and notices
4. Less cumbersome to keep hard-copy statements compared to soft-copy

For many of us, this is definitely an environmental friendly way of communicating. Also, it effectively reduce the cost of doing business for Bursa Malaysia. Once it implemented successfully, the profits of Bursa should be better... Considering to invest in Bursa shares now?

How to register?

1. From now onward, you CDS statement of account and any notice you receive from Bursa Depository will include your "Unique Password Phrase". (This will ceased once you successfully provide your email address via Bursa Malaysia's website)
2. Then, log on to Bursa Malaysia's website and select "Request for eStatement"
3. Follow the steps and fill-in your personal details as required

As simple as that, NO document needed, NO extra cost, NO headache again. However, please be mindful that once you have provided your email address for eStatement, you will not receive any statements or notices via normal post anymore. Once successful register, you will receive an email confirming your email address within 2 business days and thereafter a computer generated confirmation notice will be mailed to your address.

I have already register my email address under eDividend initiative, do I need to register again?

YES, because there are different type of services.

I have more than one CDS account, do I need to register my email address for each of them?

NO, you just need to register one email address ONCE for all your CDS accounts.

For nominee account, how is it?

You will need to contact your nominee (etc banks or stock broking firms).

For more FAQs answer, click here.

DBKL hikes assessment rate for the sake of hiking?

Maybe the timing was not right, DBKL is in hot water these few weeks, lambasted by KL citizens for its proposed assessment rate hike up to 200%. Just when GST is coming to town, coupled with the fact that the more expensive electricity bill next month, citizens were feeling the pinch in their pocket.

What's the reason for the hiking?

Answer: "The last increase was more than 20 years ago."

As simple as that? It must be joking us... Why don't you lower down your salary because you haven't done so for past years? We're not objecting about the increase for sake of objecting. But, some form of better reason should be justify for the proposal.

Is DBKL running out of money?

According to Star newspaper, Tan Sri Ahmad Fuad Ismail, predecessor to the current mayor, pointed out that he had raised reserves amounting to RM3bil prior to retiring last year. This means that the current mayor inherited RM3bil when he took over.

With additional development expenditure and grants funded by Federal Government under various plans, DBKL should be enjoying handsome surplus. In fact, DBKL is making profits every year and together with its RM3bil cash coffer, we just don't know why such assessment hike was needed.

Instead, DBKL should cut rate to lessen the burden of rakyat.

Am I correct?

Top 3 Common Investing Mistakes

When coming to investing, do you wonder why retail investors always lose out? What are the common mistakes they made? In this article, Finance Malaysia blog pointed out the top 3 investing mistakes by retail investors.

The 3 common mistakes:

1. Trying to time the market.
   "Every often, investors thought that they can forecast the short-term direction of share market, or listen to other people (market timers). It's a big mistake. It was like a gamble, guessing the ups and downs. Can you see a gambler become millionaire?"
   
   
2. Being an active trader.
   "Buying blue-chip counters with long-term profits as a goal is the real way of investing. Don't trade actively which can resulting your goal being blurred along the way."
   
   
3. Using those high cost investing tools.
   "Every single penny you saved contributes to the total returns you gained from an investment. Investors should avoid those high charges investing tools to optimise their return. Can you guaranteed the company that charged higher perform better?"

Happy Investing !!!

5 Reasons WHY Employees Left a Company

Understanding your employees thinking nowadays is crucial to retain top talents in your organization. What's the reason behind for them to press the "Resign" button? Detecting it early and replacing it with a "Stay" button before it is too late.

Please be mindful that the generation now is different, their thinking is different, their feeling towards a job is very much different. As such, employers or top management should find out the determining factor of employees going to resign. Let's look at the reasons...

1. Better prospects
   No doubt, this is the most common reason to leave. We can't prevent someone to leave for good, either because of higher pay or better position offered elsewhere. Correct? True or not, some use this just as an excuse, rather than the reason, to resign. He/She may leave because of other reasons listed below...
   
   
2. Lack of Recognition / Respect from top management
   Sometime recognition or respect from bosses treated as an "parameter" to gauge the value of an employee for an organization. For top performers, other than monetary reward, recognition is also important. Respect come from two ways, not only towards top management. Agreed?
   
   
3. Just can't gel with company's culture
   Everyone's belief and culture may determined his/her length of service. You can't stay in a company which the culture is in contrast with yours. Remember, it's 5 days a week, 9 hours a day job. Example, most of your colleagues joining a direct sales company part-time, but you're not and against it. Can you overcome it?
   
   
4. Unfavorable company forecast
   Normally due to merger and acquisition exercise, employees may feel that it's not in their favor to stay. Maybe he/she will be the one being axed out or VSS later. Then, why don't I leave first before being forced to do so?
   
   
   
   
   
5. Imbalance Work-Life situation
   In the end, working is not everything in life, employees evaluate their lifestyle also especially when he/she gets married and having children(s). Where you work and live is also important. Time spent on traffic jam is stressful and time consuming, which may lead to the exit door.
   
   

After knowing all this, employers should be smart enough to examine each and every candidates before hiring them. Questions such as "Where they live?" and "What's their expectation?" must be asked. Happy working.

Budget 2014: Property Sector Hit Hard by RPGT and DIBS ruling

As widely expected, property sector would be one of the hardest hit sector in view of the proposed cooling measures to be imposed. Out of the 3 tightening rules forecast by Finance Malaysia, 2 already Bingo! (Read our previous articles regarding property sector "3 Tighter Rules for Property Sector?" and "3 Critical Factors to watch out by Year End")

These cooling measures announced highlighting that government will not hesitate to curb property speculations and to ensure a affordable property prices. Of course, property developers will be the one screaming painfully.

The 3 Key Measures:

1. Higher Real Property Gains Tax (RPGT)
   This was the 3rd consecutive year government raised RPGT. Even said so, it was just reinstated back to its original rates since 2007. The different this time compared to previous rounds was different set of rates to be imposed on different categories of buyers as shown below:
   
   
   
   
   
   
   
2. Banning DIBS
   As predicted by us previously, DIBS was deemed to be one of the key motivating factor for speculators, thus pushing up property prices to current level. By banning DIBS, it will effectively diminished the speculative interest as the cost of investment increase with interest payment during construction period. It's good to genuine and first-time house buyers.
   
   
3. Higher minimum Purchased Price for Foreigners
   To minimized influx of hot money shoring up local property prices, government raised the minimum purchased price to above RM1mil from RM500k per unit. However, this doesn't impact the market much because most properties purchased by foreigners are above RM1mil. Nevertheless, foreigners' favorite investment hotspot, such as Iskandar or KLCC or Mont Kiara area would be affected.

Would this be the end of property up-cycle?

Budget 2014: Good to have GST ?

Definitely, one of the hottest debate in Budget 2014 would be the implementation of 6% Goods and Services Tax (GST) starting April 2015. Although it was opposed strongly by opposition parties, government pushed ahead with its implementation emphasizing GST as a "fair and comprehensive" tax as the current tax system has many weaknesses.

Why GST is a MUST ?

Without you realizing, our current tax system has many loopholes whereby many people do not fulfill their responsibilities as a taxpayer. They tends to under-stated their real income, paying less tax than they should, or even worse... none. However, under the GST system, everyone will be taxed every time you spend.

And, if you're paying tax now, you should be happier. Why? Simply because government have a wider tax revenue now with GST because everyone is paying tax. Wouldn't it better?

Why April 2015 ?

Instead of Jan 2015 (expected date), government now has more time to explain and educate the public on GST. In other words, government is playing it safe, "buying time" to minimize the misunderstanding among Malaysians.

Is it okay ?

Implementation is very vital. It's best to implement GST and lowering down the personal income tax rate simultaneously. And, this time government did consider this well. As long as it was implemented properly, this should bode well for our nation to broaden the tax revenue, thus reducing the budget deficit and maintaining the credit rating of our country's obligations.

Why MyEG ?

Strange question over here? Yes. As we knew, MyEG already successfully completed its trial version for GST computation in business premises. Do you know why MyEG shoot up to all-time high to closed at RM2.25 today?