The year has almost ended, and if you’re a taxpayer, you know what that means. The 2022 Budget has listed several tax reliefs and exemptions for next year, and if you want to claim them, you’ll need to spend by December 31st 2021.
We’ve put together this article to break down exactly what you can claim, and for easier reference, we’re grouping them according to categories.
1. Individuals and families
To start off, employees who contribute to the Employees’ Provident Fund (EPF) will get up to RM4,000 off their income taxes. But this won’t only apply to employees who have full-time jobs. With a large number of people losing their jobs since Covid-19, many have taken up part-time or freelance jobs, becoming what is known as gig workers. Gig workers don’t have to contribute to the EPF. But if they do, they’re also entitled to the tax exemption.
If you’re a parent who’s recently gone back to the office after working from home for nearly two years, you’re probably worrying about who’s going to look after your child(ren). Kindergartens and daycare providers would be an option, but they can come with a heavy price tag too. Fortunately, you’ll be able to claim up to RM3,000 next year for kindergarten and daycare fees.
Last year, in an effort to help the automotive industry, the government waived the sales tax on new vehicles. This waiver will be extended again, but do note that you can only claim this for passenger vehicles and not commercial ones.
Besides that, the government has also proposed a 100% exemption on import and excise duties, sales tax and road tax for electric vehicles.
2. Lifestyle and entertainment
This is no longer news but we’ll just remind you, anyway: travel is back! While travellers from Malaysia can now exit the country, you might still want to travel locally first. Last year, the government announced a tax exemption of up to RM1,000 for domestic travel expenses. That has been extended again, so you might want to make use of it before the year ends and give yourself a good break.
Want a quick day trip somewhere nearby instead? Go for it, because you’ll get a full exemption on entertainment duties for theme parks, cinemas, sporting events and the likes.
Besides these, enjoy a tax rebate of up to RM2,500 when you purchase books or subscribe to newspapers and magazines. What’s even better is that this applies to both physical and online materials. But just make sure you keep the receipts for all of them, even if they’re e-copies.
You’ll get the same rebate of RM2,500 on any gym memberships or sports equipment that you purchase.
If you had to buy a new laptop this year to work from home, you’ll get to claim that as well. Enjoy a tax relief of up to RM2,500 when you purchase a mobile phone, computer (desktop or laptop), tablets or other similar devices.
And of course, working or studying from home means you have to have a strong internet connection. For internet subscriptions, you can claim up to RM2,500 as well.
4. Health and wellbeing
Covid-19 has only reminded us of how important it is to stay healthy. Undoubtedly, people have been getting themselves checked more frequently. Now if you have taken a full medical checkup this year or are planning to do so this month, you can get up to RM1,000 off your income tax.
The Covid-19 vaccine is free, for now at least. But if you want to take other shots, such the HPV one to get your immunity up, you can get another RM1,000 off.
Paying for your parents medical expenses and care? That’s another RM8,000 off, maximum. You can claim for things such as medication, nursing care, medical equipment and so on.
And that’s about it! We hope this wasn’t too much information to digest at once, but do make a note of what applies to you. As we said, these exemptions apply to any spending done by 31st December 2021. Tax filing season isn’t here yet, but just ensure you’re prepared with all your receipts by then.
Want to know what happens if you pay your taxes late? Click on the article below to find out!