Employees with a taxable income of more than RM35,000 may find an issue with opting to have their Employees Provident Fund (EPF) contribution reduced to eight percent as they may see a drastic increase in their income tax.

Inland Revenue Board (IRB) assistant director (revenue collection) Chua Tian Siang said this when explaining on the tax impact to the employers in a seminar.

“Off course, when you reduce the EPF contribution from 11 to eight percent, your taxable income will increase and you have to pay more tax,” he said.