d. Any sum paid by way of a bonus to an employee in excess of two twelfths of his wages or salary would not be allowable in ascertaining adjusted income. The above amendment is effective from October 17, 1997. e. It is proposed that expenditure incurred for sponsoring arts or cultural activity approved by the Ministry of Culture, Arts and Tourism be deductible from gross income subject to a maximum of RM200,000. This amendment is effective from year of assessment 1998. f. The maximum deductible contribution by an employer chargeable under PITA to an approved scheme in respect of an employee is currently 17% of the employee's salary. It is proposed that the deductible limit for such contributions be increased to 19% of the employee's salary. The above proposal will have effect from year of assessment 1998.       Currently, the rate of tax under PITA is 40%. To encourage companies to develop marginal fields and increase exploration of new fields, it is proposed that the tax rate be reduced to 38%. This is in line with the 2% reduction in corporate tax proposed in the Income Tax Act. The above amendment has effect from year of assessment 1998.

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