PUTRAJAYA: Employees will have the option of maintaining their contribution to the Employees Provident Fund at 11% although the Government has announced a reduction to 8%.
EPF said in a statement that members could fill up a form and submit it to their employers so that they can contribute more than the statutory rate.
“Employers will then forward the notices to the nearest EPF branch,” the government agency said.
The notice, labelled Notis 17A Khas 2016, would be made available for download from EPF’s website beginning Feb 2.
“The new monthly contribution rate (Schedule Three) can be downloaded from Feb 16,” it said.
EPF also confirmed that the employers’ obligatory contribution rates of 12% (for those earning above RM5,000) and 13% (below RM5,000) would remain unchanged.
The move to cut employee contributions from 11% to 8% was among 11 restructured and recalibrated measures announced by Prime Minister Datuk Seri Najib Tun Razak to ensure the economy and the country’s financial position remain on the right trajectory.
A similar reduction was imposed between January 2008 and December 2009.
The reduction of employees’ contribution to EPF will be from March until December 2017.
This measure is expected to increase private consumption expenditure by RM8bil a year.
Another measure announced was the RM2,000 special tax relief.
To enhance the efficiency and amount of tax collection, the Government will double compliance and auditing on tax evaders and consider relaxing penalties to encourage taxpayers to declare past income to be settled before Dec 31.