Malaysia PM Anwar tables expansionary budget, aims to lower cost of living - CNA

LOWER INCOME TAX FOR M40, HIGHER TAXES FOR THE RICH

Mr Anwar on Friday announced that the government is proposing lowering income tax for the 40 per cent middle income group (M40) while increasing taxes for the rich.

“The T20 group (top 20 per cent earners) are rich so they don’t need assistance. The B40 (bottom 40 per cent) has been given government assistance all this while. But what about the M40?,” said Mr Anwar.

“I am grateful for their patience all this while, even though they have been squeezed by the increased cost of living. So I am happy to announce that the government has agreed to increase the disposable income of the M40 group through a reduction in the individual income tax rate,” he added.

Mr Anwar elaborated that from 2023, the individual income tax rate for M40 residents, who earn between RM35,000 and RM100,000 annually, will be reduced by 2 percentage points. Currently, they pay between 8 per cent and 21 per cent, depending on their income.

Mr Anwar said this tax cut is expected to benefit approximately 2.4 million taxpayers, giving them extra disposable income of up to RM1,300.

On the other hand, Mr Anwar added that high earners with annual incomes of between RM100,000 and RM1 million annually will be taxed between 0.5 and 2 percentage points more.  Currently, they pay between 24 per cent and 26 per cent, depending on their income.

He said the progressive increase in income tax is expected to impact less than 150,000 taxpayers.

“This is a small number of people … but they must also shoulder the responsibility. Because if we want to lower the burden of the poor and middle income, the rich should contribute slightly,” he added.

Mr Anwar added that for the B40 households with income of less than RM2,500 a month, they will receive cash aid of up to RM2,500 depending on the number of children through the Rahmah Cash Aid initiative.

He added that food baskets and vouchers for staple food items worth RM600 will also be extended to Rahmah Cash Aid recipients who are registered.

Mr Anwar on Friday reiterated that the government has no plans to implement a broad-based consumption tax such as the Goods and Services Tax (GST).

“With the majority of the people still facing difficulties, food inflation exceeding 5 per cent, and low wage rates, it is not appropriate at this time to introduce and implement such a tax,” he said.

He added that the government was also studying how to introduce a capital gains tax for unlisted share disposal by companies, in line with international best practice guidelines.

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2023-02-24 12:03:04Z
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