Malaysia Railway KTM

I have a walk on the railway road a month ago...before the railway tracks were closed from public to be dismantled and return back to Malaysia's government by end of this year.

For those who did not aware, following the agreement between the two governments, the land of Tanjong Pagar Railway Station shall be returned to Singapore. Thus, the operation of KTM train travelling within Singapore was ceased from 1st July 2011 onwards.

I went to have a walk along the railway from Bukit Timah Station until Railmall.

It was quite strange to walk along the railway...(never have thought of this in Malaysia..., as most of the rails are still in service). Furthermore, to see so many people also coming to walk along the rail......sometimes really think that we have nothing better to do in Singapore......especially if you are alone here...haha...

Anyhow, a walk of about 3km along this track, you can still see some greenaries...as Singapore cannot developes the path along the railway before this...but really a lot of people...whole family...hehe...

Even some government official was here in the morning...where I saw a stage with banner along the way...Singapore has classified this as the green corridor and part of the building (train station), bridges, etc shall be maintained as heritage...

It was a hot day...Malaysians which always travel with car really cannot understand why we want to walk few kilometers to enjoy the sceneries...haha...

Singapore Credit Card 2

After waiting for 1 month, my application for Singapore Maybank's eCard Platinum got rejected...wow...If you are thinking that you are a Malaysian, Maybank should have no problem approving your credit card...you are wrong...in Singapore, rule is rule.

I really supprised that Maybank turned me down. With my record of transactions and dealing with them in Malaysia, I thought should be no problem.

I have to ask my colleague to purchase ticket back to Malaysia, very troublesome.

My thought is that my annual income does not meet their requirement. But they didn't give me any reason in their postage letter to me or when I gave a call to the call center.I gave up in applying Maybank's credit card as they require their foreigner card holder to have a minimum SGD80,000 of annual income.

CIMB Platinum MasterCard, POSB Everday Card and UOB One Card

After comparison within the other credit cards offerred, I have selected CIMB Platinum MasterCard POSB Everyday Card and UOB One Card as my suitable choice.

I have made some comparison as below:

Credit Cards' Offers Comparison

As shown, CIMB offers the best benefits and requirement combination. The free for life fee waiver is one of their best features. The only disadvantage is they have limited branch and cannot pay via Internet banking by linking to the CIMB bank account.

But with the previous experience getting rejected by Maybank, I applied for both CIMB and POSB. I omitted UOB because I still not openned an UOB bank saving account. 

At last I managed to get both CIMB and POSB cards...

Comparison between Malaysia Income Tax and Singapore Income Tax 6 --- Numerical Comparison

After posted several posts on tax comparison between Malaysia and Singapore for year 2011 from several angles, i.e. Tax Rate, Tax Reliefs, Tax Rebate, Tax Filing, and Tax Payment, it is good that I post a numerical comparison to show a better picture.

I shall perform a comparison for salary range from 2,500 per month to 25,000 per month (RM/SGD). To be fair, it shall be a dollar-to-dollar comparison without currency conversion. I shall assume a 2 months bonus payout from each year.

On Tax Relief, Malaysia's Tax Resident shall enjoy more for lower income group, where Personal Relief of RM9,000, Broadband relief of RM500, assumption for book purchase of RM150. On the EPF and Life Insurance, I assumed 11% and 10% (of annual income) respectively with a cap of RM6,000. Lastly, I assume of a Medical Insurance of 5% (of annual income) with a cap of RM3,000.

As for Singapore Tax Residents, the Tax Relief catagories are limited, i.e. Personal Relief of SGD1,000, month income's  CPF of 20% with a cap of SGD54,000 and bonus's CPF of 20% with a cap of SGD22,500. Life insurance is not considered as the cap is only SGD5,000 if no zero CPF contribution.

As a comparison, Malaysia has a higher tax relief for lower/middle income group but Singapore is comparable when the income gets higher.

In term of Tax Rebate, Malaysia has only tax rebate of RM400 for taxable income lower than RM35,000 per annum. In Singapore, for year 2011, the tax rebate is 20% of the tax amount with a cap of SGD2,000. For both countries, I assume the tax payer has no zakat contribution and other rebates (Singapore has further Parenthood Tax Rebate).

With all the above assumptions, I found the below table:

Malaysia has a lower income tax for monthly income lower than 4,000 per month. (But please note that Malaysia starts to pay tax with annual taxable income more than RM2,500, in Singapore it only starts to pay tax when annual taxable income more than SGD 20,000).

For monthly income more than 4,000, the tax amount in Singapore is lower, and the magniture increases as the income increases. It is obviously because the effective tax rate is about half of Malaysia. This is just my rough comparison, feel free to comment and discuss.

(Latest news informed that Malaysia Government plans to give fix tax rate of 15% for 5 years to Malaysian Talent that have been working abroad to come back to serve the Nation)

P/S: This shall be my last post on this topic this year, remember to file your tax (for Malaysian), as deadline is near. Singapore has done with it yesterday (15th April).

Comparison between Malaysia Income Tax and Singapore Income Tax 5 --- Tax Payment

After filing your incomes and reliefs via e-filing in both countries, it is time to make your payment...

In Malaysia, you have multiple ways to pay your income tax, via Internet Banking, Over-the Counter, via ATM, via Tele-banking, via Cheque, etc...it seems to be very convenient...actually most of us opts for MTD (Monthly Tax Deduction Scheme or PCB, Potongan Cukai Bulanan in Malay laguage) by our Malaysian companies...

Please don't get me wrong, it is a easy way as part of your salary was used to pay for the tax monthly, it shall cushion the impact of having to pay a large chunk of money in April every year, you can pay in by instalments. The only thing is that the way our LHDN is calculating the amount to be deducted every month. I found that it is based on a table, "supposed" to take into account your monthly salary, whether you are married, how many kids you have, whether your spouse is working or not. Sometimes, it is very confusing...even for most of the companies' HR. As a result, at the begining of every year, after you have your annual increment, it may takes one month to one quarter for your HR to settle down with the new MTD amount. You may need to adjust your monthly budget accordingly for a few months to reflect your net income.

If your company practice paying performance bonus in a particular month of the year, you shall be deducted with a huge amount of MTD as they assume your monthly income is that with the addition of bonus. So we need to declare these deduction when we perform our e-filing. It normally shall results in over-deduction if you have a huge deduction during bonus. Although the money shall be returned to you, it may take some time (you get your bonus in December, deducted MTD, but get your refund only after you perform e-filing in April). But I heard now the process of tax refund is very fast, within a week (after you submitted your e-filing) you can get the cheque...

In Singapore, with a relatively simpler tax filing process, the payment process also is almost similar. You can pay it via Internet Banking, AXS Station, or via GIRO. GIRO is the linkage of the Association of Banks in Singapore (ABS). Singapore's IRAS offers the tax payer to pay their tax via 12 months instalments similar to Malaysia's LHDN. But it is an interest free instalment after you have declare your income and file your tax return...in other words, you are paying your last year tax by instalment this year, interest-free... 

It makes an real advantage and encouragement for tax payer, as you can spend or invest your money first and enjoy the interest free tax payment in Singapore. But in Malaysia, you have to pay your estimated tax, but normally estimated more monthly first for that assessment year, you are lossing the opportunity cost as well as the time value of money...

In conclusion, my comparion of the tax processes between Malaysia and Singapore is completed. It seems Singapore tax structure is better in term of the tax rate, rebate, filing process and payment scheme. The only advantage of Malaysia's tax structure is only more type of reliefs.

(I may do a numerical comparison on my next post)

Comparison between Malaysia Income Tax and Singapore Income Tax 4 --- Tax Filing

It is time to file your tax, in Sinagpore the due date is 15th April every year, while Malaysia is until 30th April every year (for employed tax resident payers)

In Malaysia, we need to get an e-pin to start your e-filing, it is either getting it through your HR or visit the nearest LHDN (Lembaga Hasil Dalam Negeri) branch when you first year of filing your tax. Subsequent year it shall be just reuse the e-pin and perform your filing. Some of the peple still prefer to file their tax using hard copy, which is still acceptable. For me, I have gone through the transition from hard copy to e-filing, my previous Malaysia company HR did arrange the LHDN officer to teach us and register an e-pin for us when the e-filing system was first introduced few years back...

In Singapore, the IRAS (Inland Revenue Authority of Singapore), introduced a system called No-Filing Service. Basically, you do not need to do anything......haha...If your employer is participated ub rge Auto-Inclusion Scheme (AIS), which most of the Singapore companies do...you need not file your tax for the year of assessment...(to find out wether your employer is participating in the AIS, please refer to IRAS website, under Quick links>e-Services>Other e-Services>e-Submission of Employment Income> Participating Organisations).

Hence, practically we no need to do anything in Singapore for our tax return assessment, because your employee shall key in your annual income...you only need to login to verify and input any additional incomes and your tax reliefs. All these information shall be updated in your IDRS (Income, Deductions, Reliefs Statement). If you do not have any changes on IDRS from the previous year, basically you not even need to login...so simple and convenient...no excuse for you not to file your tax, huh....

By the way, in order to login to your IRAS file, you need an IRAS PIN or SingPass. Although you are not an PR or Citizen, we can apply for either of them...(initially I thought SingPass is only for PR/Citizen, so I have the expriences of applying both....). Both of this PIN can be applied online...(so convenient)...only that SingPass shall be sent to the address on your EP while IRAS PIN you can specified your address. You can get both of these PINs within a week.

In Malaysia, every year, you need to wait for your employer EA form (record your income, EPF, PCB, etc), to dig out your files and receipts, try remember how the filing is done, fill in page by page (although is online), recheck your own calculation with theirs....quite troublesome and tedious...which why all the employee do it last minute and hung the system...

We can said that Singapore's tax relief is much lesser that's why it is easier and more efficient to file it compared to Malaysia's. But Malaysia's LHDN can just keep our previous year records and let us check accordingly. The employer part is also can be made automated as the income from your employment and EPF is no different between your record and your employer's record and should not be altered. This shall improves the process of filling up the tax return file.

(to be continued....)

Comparison between Malaysia Income Tax and Singapore Income Tax 3 --- Tax Rebate

Now is on Tax Rebate, for Malaysia, it is only for tax payer with taxable income of RM35,000 or less. In Singapore it is applied to the whole taxable income spectrum with a cap. 

The amount of rebate also is more in Singapore. But please note that this may be only applicable to year 2011 assessment as the Singapore government recognized that the financial crisis affects a lot of the tax payer in 2010, thus, granting this tax rabate to ease a bit of our pain...

On Zakat is almost similar...(I didn't really check much on this, please verify yourself)

There is another evident that Singapore governement is really embarked on the increase population policy...by giving tax rebate (I think is for every year...) for children that we have.

(to be continued...)

Comparison between Malaysia Income Tax and Singapore Income Tax 2 --- Tax Relief

It is quite different in term of the catagories on Tax Relief (which means what we can deduct from our income to reduce the chargeable income) between Malaysia and Singapore tax structure.

I shall separate the tax relief into three categories, i.e. Normal Care Taking Expenses , Consumption Expenses and Retirement Schemes.

Table 1: Normal Care Taking Expenses Tax Relief

From Table 1, we can observed that Singapore really trying to encourage female to increase birthrate, so many tax relief for working mother. One thing to note, not that Malaysia government does not encourage "citizen" to increase population by giving tax relief, just that majority of the female "citizens" are not working but just staying home to take care of babiesssss.....

The Singapore government also encourage caring society by giving tax relief to employee who taking care of their elders and siblings, this in a way reduce the responsibility of the government and sharing this saving with the working tax payers...

But I feel the individual tax relief of SGD1,000 is too little for working tax payers...as you are taking care of so many people in order to get the tax relief but why not anything for yourself? (Especially new foreign worker like me where my parents and family are still in Malaysia, nothing to relief...) On the other hand, Malaysia is giving RM9,000 as the individual tax relief, mostly to help the low income "citizen", but ok also, as we enjoy it as well...

Table 2: Consumption Expenses Tax Relief

As in Table 2, we can clearly see that Malaysia government really encourage all the tax payer to spend, buy house, books, sport, computer, broadband, health screening, etc...it is to make sure we have a balance lifestyle...haha.......Singapore is still the same objective to encourage birth and mother to return to work force...

Table 3: Retirement Scheme Tax Relief

Lastly, Table 3 shows that Singapore is more encourage tax payer to save for our golden days...As Malaysia is still going to increase the "nation" average income, so tax gao gao the higher earning middle class......who is the majority of the tax contributor...encouraging talent to move on...

Please note foreign worker like me can signed on with the SRS (Supllementary Retirement Scheme) to enjoy certain tax relief as I still do not contribute to CPF, and the SRS tax relief is more SGD26,775.


(to be continued....)

Comparison between Malaysia Income Tax and Singapore Income Tax 1 --- Tax Rate

It is the period of time for both Malaysia and Singapore governments to collect their revenue......It is time to pay our tax...

This is my first year paying tax in Singapore. Before I accepted my current job, I roughly have the information that Singapore has a lower tax rate compared to Malaysia, it was part of my consideration when I agreed to accept the offer of a lower pay (dollar-to-dollar) in Singapore.

Now, since it is the time for me to declare my income for year 2010, (please note that in Singapore, we consider it as YA 2011, as we are paying tax in 2011) I am think of sharing some comparisons and thoughts between the two income tax system.

Firstly is the tax rate:

Malaysia Income Tax Rate Assessment Year 2010

Singapore Income Tax Rate Assessment Year 2011 (Income of 2010)

As you can see above (please note the unit is RM and SGD respectively without conversion), Singapore obviously has a lower tax rate. Singapore's employees only start to pay tax when our annual chargeable income is above SGD20,000. But in Malaysia, the minimum annual chargeable income that shall incurr tax is RM2,500 (I still remember when I first started to work in Malaysia, my colleagues and I misinterpret that it was monthly income...).

The tax bracket in Singapore also is bigger. Singapore annual chargeable income range is bigger for each tax bracket. Thus, it really helpful for the lower or medium income range employees as we can enjoy the lower tax rate for a longer period (based on yearly increament). In Malaysia, the increament of tax rate is also higher, thus, as a tax payer you shall feel a lot of different when your income upgraded to another tax bracket.It seems like your increment becomes nothing or little if it just make your taxable income to the next tax bracket......Singapore's tax rate increases between tax brackets is not as severe.

Lastly, the maximum tax rate for Singapore employees is much lower as compared with Malaysia's, i.e. 20% versus 26% (I remembered previously in Malaysia, it 27% to 28%).

It is understandable that Singapore is a country with limited natural resources, their strength is in their people. It is important to attract talent from all over the world to work and contribute to the country's GDP. Hence, the income tax rate is much lower, in fact Singapore is the second lowest tax country after Hong Kong in Asia.

Another thing to notes is that Singapore has 7% GST (Good Service Tax) to contribute to the government income. In a way, this is to tax the more wealthy people as the more you buy the more you pay your GST. Malaysia is still in the debate of introducing the 4% GST, but if I not mistaken the Government Service Tax has increased from 5% to 6% (I noticed when I dined in one of the McD in Malaysia).

(to be continued...on Tax Relief and Rebate)