Friday, April 26, 2013
Monday, April 15, 2013
Here are the reasons behind the sharp selloff in gold:
- Supply may rise: Cyprus is planning to sell gold reserves to raise around 400 million euros to help finance a bailout. This has raised concerns that other indebted euro zone countries like Italy, Spain and Portugal could follow suit. As a result, investors have cut exposure to gold, with total holdings at the world's major bullion gold-backed exchange-traded-funds falling to their lowest since early 2012. (Also read: Why 2013 may not be the year of gold)
- Inflation moderating: In the U.S., the world's largest economy, wholesale prices fell in March by the most in 10 months. Since gold is regarded as an inflation hedge, any indication that prices aren't rising has prompted investors to sell gold.
- Interest rates may go up: U.S. interest rates might edge higher sooner than previously thought. This will tend to strengthen the dollar and weaken gold, since another reason investors buy gold is to hold it as an alternative to U.S. dollars. When traders expect the dollar to rise, they will sell gold.
- QE ending sooner than expected: Minutes from U.S. Fed's policy meeting suggest the quantitative easing programme could draw to a close by year end, earlier than some economists had expected. This has led to panic selling in gold.
- Risk-on trade: Investors have been flocking to equity markets for better returns. The Dow Jones Average in the U.S. is trading near its all-time high indicating increased participation in the equity markets.
Posted by Bn911 at 4:39 AM
Sunday, April 7, 2013
The most basic rule of all is to make sure you file your tax returns, and pay your dues on time.
IT’S the tax season again. This time round, what can Malaysian do to maximise their savings?
According to KPMG Tax Services executive director Datin Pauline Tam, there are several new personal deductions for individuals who are filing their tax returns for the year 2012.
Malaysians who have opened a Private Retirement Scheme (PRS) account last year can claim for a deduction of up to RM3,000.
“People should take note that while the deduction for life insurance and the Employees Provident Fund (EPF) does not have a time limit, the deduction for PRS is only effective from the year of assessment 2012 to 2021, unless this is changed later on by the Government,” she says.
Married couples with children would qualify for a deduction of RM6,000 if they have opened an SSPN (Skim Simpanan Pendidikan Nasional) account to save for their children’s education last year. This is up from RM3,000 (in 2011).
“This deduction is on a per-taxpayer basis, so if the family has two children, the father can open an account for one child, and the mother for the other child. This would allow the parents to maximise their savings,” she says.
Tam also points out that this is the final chance for Malaysians to claim their deductions for broadband subscription.
“This RM500 deduction began in 2010, for three years, so this is the last year this deduction will be available.”
She adds that the RM10,000 personal deduction for interest on housing loan also has a three-year expiry, but this is dependent on “the date in which the interest is first expended”.
However, there are conditions attached to this deduction.
According to the Explanatory Notes (Form BE 2012) provided by the Inland Revenue Board (IRB), only Malaysian citizens who are residing in the country are entitled to this deduction.
Further, it is limited to one residential property only, with the Sales and Purchase Agreement (SPA) executed between March 10, 2009 and Dec 31, 2010. The property must not be rented out.
If the property is under a joint name (for example, husband and wife), then each of the owners can claim up to 50% of the interest paid.
“Let’s say the interest expense is RM12,000 for last year, and the property is under a joint name, then the deduction is restricted to RM5,000 each, because the maximum deduction is RM10,000,” Tam says.
She explains that when it comes to property, it always boils down to the legal ownership.
“IRB will always look at who the legal owners of the property are. It doesn’t matter who is actually financing it (whether it’s fully financed by the husband or wife). In the end, it still goes back to the document, which is either the title deed (for landed property) or the strata title (for high-rise property).
“Legally, both names have an entitlement to income derived from the property. So if there are two names, it is usually 50:50. If there are three names, then each name has a 33% entitlement,” she says.
It was previously reported that the IRB is confident of collecting RM130bil in taxes this year, in line with the country’s economic growth.
Last year, IRB collected about RM125bil in taxes, which is 13.76% higher compared with the RM109.6bil collected in 2011.
PricewaterhouseCoopers (PwC) senior executive director Sakaya Johns Rani, too, has some advice to share.
Retirees with retirement gratuity can claim tax exemption for the gratuity, but it does have some conditions attached.
The Income Tax Act 1967 states that the retirement gratuity would be tax exempted if “the retirement is due to ill-health”, if the retirement takes place on or after reaching 55 (or the retirement age as per the employment contract), and the employment has lasted 10 years with the same employer, or companies within the same group.
As for Malaysian talent who have returned from working overseas, they, too, can have tax savings if they meet the conditions under the Returning Expert Programme (REP).
“Malaysian talent who come back can write to TalentCorp, and if they meet all conditions, they will qualify for a 15% flat tax rate.
“This tax rate also applies to knowledge workers who are employed in Iskandar Malaysia,” she says.
(Details and conditions can be found at http://www.talentcorp.com.myand http://www.iskandarmalaysia.com.my)
In general, to maximise their tax savings, Malaysians need to look at their overall profile as a tax payer.
“Are you single or married? Do you have children? Look at your profile, and then look at all the possible deductions that you can make,” Rani says.
The tax experts also advocate for couples to file their income tax separately.
“Always go for separate filing because when you combine your income, your taxable income becomes much larger and it will reach a higher tax rate faster. Filing separately allows you to reduce the effective tax rate.
“Also, for child relief, a basic tax principle is to allow the higher income spouse to claim for the relief (as the savings will be more),” Tam says.
But the most basic rule of all is to make sure you file your tax returns – something Rani says she has observed that many Malaysians take for granted.
“Many assume that just because their monthly pay is subjected to the monthly tax deduction (MTD), their taxes are paid and taken care of. That is not true; you still need to file your tax returns,” she says.
And don’t pay your taxes late.
The deadline for those who submit their forms via e-Filing is May 15 (for the BE Form), and July 15 (the B Form).
However, those who are still submitting their forms the conventional way will still have to meet the April 30 (BE Form) and June 30 (B Form) deadlines.
“There are penalties for late filing. Even if you are one day late, the penalty can be quite heavy (at 20%), and the penalty is on your tax payable before it is set off by the MTD.
“For example, if your tax payable is RM10,000, but your MTD is RM12,000, you should have a repayment of RM2,000. But because you were late in submitting your tax assessment, IRB can impose a 20% penalty on you, which is RM2,000. Hence, you will lose out on your repayment,” Tam explains.
Further, she advises Malaysians to be mindful of what they claim.
“Make sure you fulfil the conditions of a deduction before applying for it. If you submit an incorrect tax return, the IRB can impose a penalty of up to 100% (on the additional tax) if there is an omission of income or over-claim of expenses.
“For example, if you make a deduction of RM10,000 (but you are in fact not entitled to it), and your tax rate is 26%, that would have given you tax savings of RM2,600. IRB can impose up to 100% penalty on the RM2,600, which means now you have to pay RM5,200 instead,” Tam says.
Finally, don’t be afraid to ask for help.
“Read the explanatory notes to understand the terms and conditions properly. If you still have problems, call IRB’s customer service centre and ask them for help.”
Source: Star online
Posted by Bn911 at 7:50 AM