KUALA LUMPUR: The two-percentage point cut in personal income tax under Budget 2023 will have a positive impact as it will increase the beneficiaries’ disposable income, says Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi (pic).
He said although the savings of up to RM1,300 from the tax cut would not be in direct cash receipt, it would still ease the people’s burden in managing their costs of living.
"This will help to ease the family burden, for example in reducing the cost of managing family expenses due to an increase in family members and defraying schooling expenditure of children like purchase of textbooks," he said.
He said this in an exclusive interview on Budget 2023 over Nasional FM radio on Saturday (Feb 25).
On Friday (Feb 24), Prime Minister Datuk Seri Anwar Ibrahim, when tabling Budget 2023, said beginning this year the income tax rate of resident individuals would be reduced by two percentage points for every income band from RM35,000 to RM100,000.
The prime minister said this was expected to benefit about 2.4 million taxpayers, thus increasing the disposable income of the M40 group by up to RM1,300.
Ahmad Zahid said the tax reduction was in line with the prime minister’s desire to ease the financial burden of those in the B40 and M40 groups.
"We can see from the structure of society that the T20 covers about 20 per cent of the Malaysian population with a certain income level, the M40 group is of middle income and B40 is of low income.
"But after the Covid-19 pandemic, the M40 might have been reduced to just 20%, becoming M20 because some with middle and moderate income are said to have become B40. So, the B40 group may have become B60.
"So, what is the best way to help? Given this situation, the prime minister wants to ease the family financial constraints of the M40 group by taking this measure (income tax cut)," he added. - Bernama
