Malaysia EPF Contribution Rate 2016: 8% or 11%? What izzit??

(image from MalaysiaInsider)

One of the main objectives of Malaysia Budget 2016 revision is to spur growth, and increasing the people’s disposable income will in turn increase consumer spending.(from imoney)

This topic came up during lunch just now. Some interesting opinions of 2 people posted by thecoverage.my . If lazy to read, scroll down to bottom, i read & conclude for you hahaha

I think he mean spend all RM1800 on GST taxable stuff.

If we cut EPF contribution down to 8%,the conclusion seems like this:

a) We get a little more $$ at end of each month to spend (that's what our gomen wishes)

b) We lose a little $$ each month to our EPF (retirement fund) - ALOT if counting compounding interest as done by iMoney article below.

c) We have more $$ under taxable, so slightly more $$ tax gomen gets from taxable people.

d) If we spend extra $$ ,we pay GST, it goes back to gomen pocket...yumm~yumm~ unless you go pasar malam all the way or spend strictly on zero-rated items only.

(from imoney)

Basically, if we play to the game, more $$ from salary, higher tax paid- lower tax relief claimed & less retirement fund interest received on long term. 

More $$ to gomen thru income tax & GST. 

At least i got a clearer picture now.