PETALING JAYA: Employees’ contribution to the Employees Provident Fund (EPF) will be reduced by three percentage points from March this year, says Datuk Seri Najib Tun Razak (pic).
The move is one of 11 key measures in the revised Budget 2016 announced by the Prime Minister on Thursday.
Najib, who is also Finance Minsiteer, said employees currently contribute 11% of their monthly salaries to EPF, meaning that the latest measure will automatically reduce this to 8%.
However, the percentage of employers’ contribution remains the same, said Najib.
“This measure is expected to increase private consumption expenditure by RM8bil a year,” he said.
Deputy Finance Minister Datuk Johari Abdul Ghani said the EPF contribution reduction has put more money into the rakyat’s pockets.
“Employees will receive returns of 3% of their EPF contribution immediately. So if your income is RM5,000 a month, you will receive RM150. Over twelve months, that’s extra money to spend,” he said, adding that increasing consumer spending will stimulate the economy.
On top of that, he added, the additional tax relief of RM2,000 was also good for the rakyat.
When contacted, EPF said they would be releasing a press statement on the matter soon.
Najib also announced that the Government would provide a special tax relief of RM2,000 to individual taxpayers with a monthly income of RM8,000 and below.
It will apply to the year of assessment for 2015.
“Although the Government will forego revenue of RM350mil, it will provide individual tax savings of up to RM475, which will benefit some two million taxpayers,” he said.
Giving emphasis on providing affordable homes, Najib announced that all new housing projects priced up to RM300,000 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 Department (JPN), 1Malaysia People’s Housing Programme (PR1MA), Syarikat Perumahan Negara Berhad (SPNB), Perumahan Penjawat Awam 1Malaysia (PPA1M) and state agencies as well as the private sector.
More than 100,000 housing units are expected to be offered under this new programme.