PETALING JAYA: Tax reliefs should do more to recognise the financial burden of caring for children, elderly parents and other dependents, says a consumer group.
Federation of Malaysian Consumers Associations (Fomca) chief executive officer T. Saravanan said while existing tax reliefs provide useful support, a systematic review is needed to reflect changing household needs and essential costs.
“Many middle-income families appear financially comfortable on paper.
“However, after paying for housing, childcare, transport, healthcare, insurance and ageing parents, their remaining income can be very limited.
“Tax policy should better recognise these unavoidable responsibilities,” he said.
For single-income families, he said Fomca proposes reviewing support for dependent spouses and unpaid caregivers.
“One income may support several people, while a spouse may have stopped working to care for children, a person with disabilities or an elderly parent. That caregiving responsibility deserves recognition.
“For working parents, relief should better address the full cost of necessary childcare,” he said, suggesting reviewed coverage for registered after-school care, school holiday care and suitable services for parents working shifts.
Saravanan said existing medical and caregiver reliefs should also better reflect long-term care needs.
“There can be clearer coverage for qualifying home care, registered day-care services, respite care and necessary modifications that make a home safer for elderly dependents,” he said.
He said housing affordability also deserves attention, adding that targeted relief or equivalent assistance for essential rental expenditure, particularly for financially stretched households, should be examined.
“All measures should have reasonable caps, clear eligibility requirements and documentation safeguards so that support reaches genuine needs,” he said.
Saravanan further proposed assessing household vulnerability through income, family size, dependants, location and reasonable essential expenditure.
“Two families earning RM7,000 a month may have very different financial circumstances,” he said, stressing that the claims process must be straightforward.
“Consumers need clear explanations of qualifying expenses and the documents required, supported by practical examples,” he added.
He stressed that tax relief cannot substitute affordable public healthcare, reliable public transport, accessible childcare and measures addressing rising essential costs.
“Increasing a deduction will have limited value if the underlying expense continues to rise sharply,” he said.
This comes as tax experts and economists have said that Malaysia’s income tax relief system should evolve in line with rising household expenses, proposing several areas for review ahead of Budget 2027.
Budget 2027 is scheduled to be tabled in Parliament this Friday (Oct 9).
