The tax exemption on the purchase of devices and gadgets will come in handy for those WFH, or those with children attending online lessons.

THE Covid-19 outbreak and various phases of movement restrictions since last year have disrupted family plans and business activities in almost all areas.

A certain percentage of those in the middle 40% (M40) income group has not been spared by the crisis either.

M40 refers to those households with a monthly income of RM4,850 to RM10,959, according to the Statistics Department.

Media reports have it that amid the pandemic, about 600,000 M40 households – or 20% of the middle-income group – have slipped into the bottom 40% category.

Some households from this category even withdrew from their retirement savings through i-Lestari, i-Sinar and i-Citra programmes for emergency purposes, besides opting for a voluntary cut in the EPF contribution rate.

Noting that the M40 needed assistance in the interim as they strive to pick up again, the Government continued to provide support through Budget 2022, including various tax reliefs.

Timely relief for M40

Federation of Malaysian Consumers Associations senior vice-president Datuk K Koris Atan said work-from-home (WFH) employees with school-going children would surely benefit from the special individual income tax relief of up to RM2,500 on the purchase of mobile phones, computers and tablets.

“Many companies would still carry out the WFH policy and this trend is going to stay put for some time, as the number of cases is still relatively high in the country.

“The tax exemption on the purchase of these devices and gadgets will come in handy for those WFH, or those with children attending online lessons.

“It’s time for an upgrade, especially those with devices or gadgets that have been showing signs of wear and tear,” he said.

Under Budget 2022, the Government has extended the special individual income tax relief of up to RM2,500 on the purchase of mobile phones, computers and tablets until Dec 31 next year.

Addressing current issues

Koris said another commendable measure was the special individual income tax relief for domestic tourism expenditure of up to RM1,000, which has been extended until the year of assessment 2022.

“Having been cooped up at home for so long due to the various phases of the movement control order, it is time to get some fresh air and enjoy the beach and sun.

“The incentive should serve as a welcoming respite for families, who can now spend quality time together doing outdoor activities, besides being a catalyst to help the tourism and hospitality sectors pick up again, most of whom are small and medium enterprises,” he said, noting the economic spillover effect from the tax relief.

Another initiative beneficial to the M40 group is the extension of the reduction of minimum employee contribution rate for the Employees Provident Fund from 11% to 9% until June 2022, which would see more money flowing into the economy.

Mah Sing Group Bhd founder and group managing director Tan Sri Leong Hoy Kum had previously told The Star that the measure would increase cash in hand for the rakyat, easing their monthly financial burden due to the effect of the pandemic.

Key to upskill for growth

Meanwhile, the Penang Chinese Chamber of Commerce Young Entrepreneur Section (PCCC YES) lauded the tax relief for expenses related to attending skills development or personal development courses, which has been increased from RM1,000 to RM2,000 until 2023.

Those who take up courses with approved professional bodies are also eligible for tax relief on fees of up to RM7,000. The approved professional courses include accounting, finance and those related to environmental, social and governance (ESG) considerations.

PCCC YES chairman Lee Toong Leon said investing in value-added courses, especially those offered by professional bodies, would be vital in the era of digitalisation and technology disruption.

“The pandemic has posed a huge challenge to companies in charting their direction or making future plans.

“It’s an eye opener to all of us that this pandemic is capable of completely wiping out certain business opportunities. Anything can happen.

“All of a sudden, salaried workers could find themselves out of jobs and businessmen could see their hard work come to naught.

“This is why it is important for us to take up professional courses, especially those related to ESG so that we can have an added advantage to explore other job opportunities in the future.

“Individuals, especially those from the M40 group whose personal income is not affected during this time, should capitalise on this,” he said.

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