Tax hike but 2.4 million to pay less

Precious cargo: Anwar leaving the Finance Ministry with the Budget 2023 papers for Parliament with the ministry’s two deputies, Datuk Seri Ahmad Maslan (left) and Steven Sim. — Bernama

KUALA LUMPUR: Income tax has been raised by 0.5 to 2% for those earning between RM100,000 and RM1mil annually under Budget 2023, but it will only affect some 150,000 people.

This is because taxes in the RM35,000 and RM100,000 range will be cut by 2%.

Effectively, the tax reduction in the lower bands will compensate for the higher taxes for those earning up to around RM230,000 per year. Most taxpayers will actually see an overall tax cut.

Many, though, did not realise that there would indeed be savings.

Digital content creator Tai Zee Kin went on Facebook to complain that the government had constantly treated the T20 group as “low hanging fruit”.

“The government is running out of ideas to raise fair revenue, and antagonises the very cohort of people who create business, jobs, markets and forms the very backbone of the economy,” he added.

He felt the GST would be a better system, as it taxes the rich, who consumed “luxurious products”.

He also urged the government to relook the subsidy on RON95 petrol, and help the B40 and lower M40 through a petrol subsidy scheme.

Salesman Albert Mah, 38, said increasing taxes for the rich and reducing it for others was like robbing Peter to pay Paul.

“All of us have somehow been affected in recent years by the pandemic, so an increase of personal tax at this stage is certainly ill-advised.

“The government could have cut back on other spending,” he said.

Meanwhile, those who make between RM35,000 and RM100,000 are overjoyed after Datuk Seri Anwar Ibrahim announced the 2% tax for those in the range.

This, he said, would increase the disposable income of the M40 group and help them tackle the rising cost of living.

About 2.4 million taxpayers are expected to benefit from this cut, with each having an estimated RM1,300 more to spend a year.

Clerk M. Nisha 38, said the amount might be small but it meant a lot.

“Now, I will be able to buy a medical insurance policy for myself and perhaps, save a little for rainy days,” she added.

Security officer Mohamad Khalid Mohamad Saufi, 55, was also happy.

“My two boys just started working about three years ago and recently got married. They are thrilled with the reduction in income tax.

“I am going to encourage them to save more and remind them of the hardship people went through during the Covid-19 pandemic,” he said.