Adoption of new tax rates to calculate the Monthly Tax Deduction

The Inland Revenue Board of Malaysia (“IRB”) announced on its website the adoption of new tax rates to calculate the Monthly Tax Deduction (“MTD”) effective from 1 June 2023. The announcement made by IRB is in line with the changes to the income tax rate for resident individuals via Section 16(a) of the Finance Act 2023, which was gazetted on 31 May 2023.

The latest tax rates for resident individuals is set out in the following table.

Chargeable Income	Previous Tax Rate (%)	Current Tax Rate (%)
RM 35,001 to RM 50,000	8	6
RM 50,001 to RM 70,000	13	11
RM 70,001 to RM 100,000	21	19
RM 100,001 to RM 250,000	24	25
RM 250,001 to RM 400,000	24,5	25
RM 400,001 to RM 600,000	25	26
RM 600,001 to RM 1,000,000	26	28

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