Shareholders dividend under the single tier tax system (STS)

Malaysia has introduced single tier tax system (STS) in Budget 2008 to replace the existing imputation tax system with effect from year of assessment 2008. This has brought major impact to the treatment of dividend paid to the shareholders.

You might have noticed that some of the companies already giving out dividends under the new STS, although they have a 6 year transitional grace period until 31 December 2013 to fully convert from imputation to STS.

Under this STS, corporate income is taxed at corporate level and is a final tax. No tax is being deducted from dividend paid, credited or distributed to shareholders. As a result, there will be no Section 110 tax credits deduction for any dividend paid under STS to individual tax payers.

While this has negative impact to lower income individual shareholders whose top income tax bracket is less than the statutory company tax rate, as they no longer eligible to claim for a Section 110 tax credits refund under the new STS, there are several benefits of moving forward from imputation tax system to single tier tax system:

• The company is able to reduce administration cost as there is no need to maintain Section 108 balances anymore.
• Individual tax payer no need to bother about dividend income and Section 110 declaration for dividends received under STS.
• High income bracket individuals need not pay tax on the differential between his marginal tax rate and the company tax rate.
• Companies with capital gains and non taxable accounting profits are able to declare dividends without any constraint. This might bring higher dividend yields to shareholders.
• Companies with huge Section 108 balances may pay special dividends during the transitional period.

Meanwhile, if you still receive dividend warrant that shows a gross dividend amount, tax deducted from the dividend and net dividend paid out, it means that the company has opted to continue using its section 108 tax credits balance to pay franked dividends to shareholders under the transitional period before 2014. And the normal procedure of declaring gross dividend income and deducting back the Section 110 tax credits in your income tax assessment BE/B Form still applicable.

My Takada ISB-889 Air Master 4-in-1 air cooler

The weather during this Chinese New Year time is freaking hot, and it is so uncomfortable to stay indoor without air-cond, not to mention sleeping in the hot night with only ceiling fan blowing at the maximum speed.

Therefore, I decided to hunt for an air cooler to be used in my hometown.

There are 2 brands of air cooler selling at Tesco for RM2xx, namely Takada and Global, but it seems that others have also hunted for the same thing like me, and they've run out of stock.

Finally, managed to buy a Takada ISB-889 Air Master 4-in-1 air cooler at the cost of RM3xx in Parkson. The size of this unit is bigger than the air coolers sold in Tesco, with a stronger blower and larger water tank. Functionality wise is the same though.

Its so-called 4-in-1 functions are:

• Cooler - with water and ice box
• Purifier - with its filter and ozone release
• Ionizer - with its oxygen bar releasing negative ion
• Humidifier - damping with water curtain

It comes with 2 ice boxes which need to be refrigerated before use and can last for 4 hours. I purchased an additional larger ice box which can last for 8 hours for night use. One of its beauty is that it consumes very low electricity, at 70W only.

Although not comparable with air-cond, this air cooler functions pretty well in keeping the room cool, and now we can sleep comfortably at night.

Laptop connecting to Internet via Bluetooth to P1i smart phone with Celcom 3G/GPRS

Happy Chinese New Year!

I am away from home during this period and would not be able to access Internet using my home's Streamyx ADSL.

Anyhow, I managed to setup my laptop connecting to Internet via Bluetooth to my Sony Ericsson P1i smart phone with Celcom 3G networking service.

I'll show you how.

Prerequisites:

• You have installed PC Suite for Sony Ericsson in your laptop. If you use Nokia or other brand, you should install the PC Suite for your smart phone as well.
• You are a Celcom mobile user. If you are using Maxis or Digi or other mobile service, the setting could be similar but not exactly the same.
• You have a 3G phone with a 3G SIM card. Probably a non-3G phone with GPRS is also OK. The phone must support Internet routing function.
• I think connecting the laptop to your phone using USB cable is a better way. Since I forgot to bring along the USB cable, I have to connect using Bluetooth, which is another workable way.

Unless you are subscribed to a Celcom monthly unlimited broadband service which the current lowest cost is RM38/month, it is advisable to subscribe to Celcom daily unlimited broadband service at the cost of RM6/day, else the Celcom pay-per-use 3G/GPRS data charge will be expensive at the rate of RM0.10/10kb.

For existing Celcom mobile user, to subscribe to Celcom daily unlimited broadband service, you just need to send an SMS with content "Broadband Daily" to 28882. Then, wait for the following confirmation SMS.

To confirm the subscription, reply the SMS with "Broadband Yes". You will receive another notification SMS if your subcription is successful.

With Celcom daily unlimited broadband service, you can now access the Internet for 24 hours at a fix rate of RM6 only, regardless of the usage.

Then, you need to pair up the Bluetooth connection between your laptop and your smart phone.

After that, run the PC Suite for Sony Ericsson in your laptop. Then, click on the "Mobile Networking Wizard" icon in PC Suite for Sony Ericsson to launch the wizard.

Then, click the "New Connection..." button in the Mobile Networking Wizard. Select Packet Switched Data (GPRS/3G) and click Next. Follow the instructions and you should be able to create a new dial-up connection in your laptop.

Once setup, you can find this dial-up connection in the Windows' Start > Connect To listing. In future, you can connect to internet via your smart phone using Bluetooth with this link and need not go through the Mobile Networking Wizard again.

Although the Internet speed of this kind of Internet connection via Bluetooth to smart phone is at 115.2Kbps only, it is much better than the 56Kbps modem dial-up Internet.

If you are still unable to access to the Internet using 3G/GPRS service, and you have access to a normal telephone line with Telekom homeline service, and your laptop has a built-in modem, you can plug the telephone line into your laptop RJ11 jack, and dial to 1315 (no username nor password required) to get a 56Kbps dial-up Internet, which is pretty slow, especially when accessing https secured websites. The charge for this EZNet 1315 dial-up Internet is 4 sen per minute or RM2.40 per hour.