WITH the rising cost of living due to persistent inflation, the people on the street are feeling the pinch at a time when global economic uncertainties appear to dictate the severity and period of continued impacts.
Thus, there is tremendous expectation that the revised Budget 2023 proposals, to be unveiled on Friday, will contain some much-needed boon to alleviate the rakyat’s financial hardships over the coming months.
The Prime Minister Datuk Seri Anwar Ibrahim has promised that the revised budget would focus on the people, where no one “should feel left out and uncared for.”
These are comforting words indeed.
It has also been indicated that the revised proposals would not be linked to the version tabled last October.
This is a curious approach indeed because from an individual tax perspective, some of the tax reliefs proposed then are worth retaining as they are broadly beneficial for all individual taxpayers.
As a recap, the proposals include:
> Expansion of medical expenses relief to cover dental examination and treatment,
> Extension of tax relief on contribution to National Education Savings Scheme or SSPN,
> Tax relief on voluntary contribution to the Employees Provident Fund,
> Extension of tax relief for childcare centres or kindergarten fees, and
> Individual tax rate deduction with tax savings of up to RM1,000.
There are good examples and lessons we can learn from the past that will help project our path forward more confidently.
In the same vein, here are some additional tax reliefs the government should incorporate in the revised national budget:
Special lifestyle and tech-related expenses
As you would recall, effective year of assessment 2020 (YA20), a special tax relief of up to RM2,500 is claimable by individual taxpayers for the purchase of a smartphone, personal computer or tablet for own use or for the use of a spouse or child.
This relief is available in addition to the existing lifestyle relief of RM2,500 and provided that the total amount has not been claimed under lifestyle relief.
However, this relief is only available up to YA22.
Not only do I believe that this special tax relief should be extended, I also think it should be expanded to include other accessories such as printers, headphones and data usages.
It would make logical sense to further encourage this reliance on electronics and advanced technology tools in our daily lives through this incentive, especially with the government aspiring to elevate Malaysia to be a tech-savvy workforce to remain competitive within the Asia-Pacific region.
Mental health care
Effective from YA22, the scope for full medical check-up of RM1,000 (forming part of tax relief in medical expenses for taxpayer, spouse and children up to RM8,000) is expanded to include expenses incurred on mental health related check-up or consultation services by psychiatrist, clinical psychologies or counsellor registered with approved authorities.
This is a positive provision, which I believe should not be restricted to just RM1,000 but be permitted to claim up to the maximum claimable amount of RM8,000.
This will encourage the people to be more open to manage any mental strain they may be experiencing, and ultimately sends a signal that the government is serious about protecting the people’s welfare.
The M40 has almost always been the main group of taxpayers carrying the weight of paying taxes with little entitlement to rebates and cash assistance.
However, this group has been hit just as hard by escalating living costs, especially those in the lower M40 bracket.
To lend this group a helping hand and ensure that no one is uncared for, it would be a good time to revisit the special relief of RM2,000 given to individual taxpayers earning up to RM8,000 a month (aggregate income of RM96,000 a year), which was once extended for YA13.
Further, instead of providing this relief in the form of a deduction from total income, it will be more impactful to allow the relief as a direct rebate against the taxpayers’ tax liability.
This will result in more disposable income in the hands of the individuals.
The Malaysia Madani concept will surely be the driving force behind the conceptualisation of the revised Budget 2023 proposals.
It is certainly no easy task for the Prime Minister to balance incentives that drive inclusivity and goodwill with much-needed progressive programmes that enable sustainable prosperity on a national scale.
One can only hope that by taking care of the rakyat’s wellbeing today, we the people will be all the more driven to work together to help Malaysia succeed long into the future.
Long Yen Ping is partner (global mobility services) while Wee Chong Eng is director (global mobility services) of KPMG Tax Services Sdn Bhd. The views expressed here are the writers’ own.