THE lifestyle tax relief announced in Budget 2017 will benefit the bottom 40 (B40) and middle 40 (M40) groups, according to global consulting firm KPMG.
Corporate tax executive director Tai Lai Kok says the measure is interesting as it includes a tax relief on gym membership fees and the purchase of newspapers.
However, he notes that apart from this, there are not many measures directed at assisting the M40 group.
On top of the existing benefits, the M40 is likely to benefit most from the tax relief on gym memberships.
“Unfortunately, I thought that there would be greater emphasis on the M40 group, given the fact that the M40s are among those most burdened by the rising cost of living,” says Tai.
Tai also suggests that the Government allow for tax deductions for newspapers without the need for receipts, as it would be more convenient.
He says that the Government should consider making things easier for the B40s and M40s in terms of implementing a blanket deduction for newspapers, without the need for receipts.
For the M40 group, the household income ranges between RM3,900 and RM8,300, while B40 refers to the bottom 40% of households with a monthly income of RM3,900 and below.
It was announced during Budget 2017 that the purchase of reading materials, computers and sports equipment would be combined as a “lifestyle tax relief” in order to facilitate taxpayers in claiming the existing reliefs.
Currently, there are 21 categories of individual tax reliefs.
The relief is given up to RM2,500 per year, and will be effective from the 2017 year of assessment.
On another matter, Tai says he does not expect another recalibration of the budget next year.
He says this is because oil prices are not likely to see much fluctuation next year.
Budget 2017 was tabled based on the premise of crude oil prices being at US$45 per barrel in 2017.
Early this year, Budget 2016 was revised due to oil prices falling to as low as US$30 per barrel.
Budget 2016 had been tabled when oil prices were at US$48 per barrel.