I have been very quiet over the last 2 months. I am sure those who are in the private sector(specialist) would know the reason. All of us are undergoing a huge heartache due to a change in the policy of LHDN/IRB to disregard any income declared under our own company (Sdn Bhd). For those who do not know, private specialist are independent contractors in a private hospital. We are not paid a salary by the hospital, thus we are not employed by the hospital. Basically, our income is the fee paid by the patient as what we charge, based on PHFSA act minus 10-15% administrative fee by the hospital. Our fees are limited by the government BUT not the hospital charges. Thus, to manage our tax better, we form our own company where the income is channelled. This practice has been going on for close to 30 years since private hospitals started in this country. Unfortunately, as the government tries to get more income from taxes, the rule has suddenly been changed. Effective mid of this year, a letter from IRB has declared that all income generated by a specialist in a private hospital MUST be subjected under personal income tax! AND it does not end there, we are being asked to redeclare our income tax from 2013 and pay the penalty for the difference not paid! AND we have to do that by 15/12/2016 to receive a reduced penalty rate of 15-20% under the amnesty period introduced by PM from March 2016. Now you know why I was very quiet over the last 2-3 months! The penalty and tax arrears can cost hundreds of thousands of our hard-earned money, working day and night.
Coming to our Budget 2017. In August 2016, I wrote about the soon to be introduced contract HO post to reduce waiting period for housemanship. Well, it has been confirmed in this budget. 2600 contract post will be created by December 2016 to cater for the shortage. He also mentioned that contract post will also be created for dentist and pharmacist but that is nothing new as it has been done. Unfortunately, the budget is silent on what happens to these contract post after they complete housemanship. Will this shorten the waiting period? Personally I don’t think so but it may shorten by 1-2 months for a short period of time. Always remember that starting from this year (2016), ALL medical schools in this country will be producing graduates and those who started to produce graduates about 4 years ago will be producing maximum number of graduates from this year. Another question is how they will select candidates for permanent and contract post? My prediction: probably government sponsored and public university graduates may be given preference and those who do well in the interview might be given priority as well. What happens after you complete housemanship? MO post are also FULL!
Another interesting development is the introduction of a new grade for specialist known as Grade U56. As we all know, since the time based promotion was introduced in 2010, there is a bottle neck at U54 as all specialist of 9 years of service will be automatically promote to U54. Unfortunately, no JUSA C promotion has been coming since the last 2 years as there are not enough post or money to do that. Thus, the creation of U56 is to relieve the anxiety among all these specialist and to encourage them to stay. I know many U54 and even JUSA C specialist resigning from government sector but with the recent IRB ruling as above, private sector may not be as lucrative as what you expect it to be. You will end up paying 26-28% of your hard-earned money to the government. You will be working 3 months in a year for the government. Now you will know why the mood among all the private specialist is down over the last 2-3 months. For me, the introduction of U56 is just to say that you are not going to get JUSA C anytime soon or even forever!
The government is also planning to expand their Full Paying Patient scheme to more hospitals as another form of encouragement for specialist to stay in the government sector. I still remember almost 11 years ago, I was one of the SCHOMOS committee member involved in this discussion to introduce FFP.
Interestingly, there is also a suggestion in the budget to build “non-profit charitable” private hospital under government initiative. RM 20 Million loan is nothing as far as building a hospital is concerned.I wonder how long will that last unless the government comes up with a National Health Financing scheme…… How a private hospital is going to survive with government hospital rates? Isn’t that what the government is doing with government hospitals? Sometimes I don’t understand all this populist ideas which most of the time never happens.
Anyway, government servants will receive RM 500 bonus and no income tax reduction as promised. He did promise few years ago of a gradual personal income tax reduction when GST is in full force. AND what happened to “janji” of reduction in car prices? Janji dicapatikan, I guess.
Finally, today’s BUDGET speech in Parliament felt like a election public rally! Why do we need all the “public” icons to be made present and introduced? First time in the history of Malaysian Parliment!
I give up some times!