CYBERJAYA – A majority of taxpayers including those in the M40 group who are not eligible for the 1Malaysia People’s Aid (BR1M) will enjoy tax savings of between RM400 and RM600 annually.
Deputy Finance Minister Datuk Johari Abdul Ghani said the savings would be enjoyed following the increase in tax relief as well as the creation of a new form of tax relief.
“Although those with a salary of RM4,000 and above are not eligible for BR1M, the taxpayers, with the relief that have been increased for wife and children, can save up to RM600 per year,” he said in a press conference after launching the 2016 Budget Briefing organised by the Inland Revenue Board here, today.
M40 refers to the middle 40 per cent with household income of between RM3,860 and RM8,319.
When tabling Budget 2016 on October 23, the Prime Minister Datuk Seri Najib Tun Razak had said that the definition of M40 would be further reviewed from time to time.
Johari said the tax savings would be enjoyed by taxpayers when they filed their tax assessment for 2016.
He said the move would increase the taxpayers’ disposable incomes and help them enjoy a better quality of life.
Najib who is also Finance Minister when tabling the budget also outlined several steps to increase the disposable incomes of M40 including increasing the tax relief to RM2,000 from RM1,000 for each child below 18 years old from year of assessment 2016.
Additionally, the tax relief for an individual taxpayer whose spouse has no income will be raised from RM3,000 to RM4,000.
The government also introduced a new form of tax relief of RM1,500 for each parent to lift the burden of children who provide care for their parents.
In a related development, Johari said the fall in global crude oil prices had caused the country to lose about RM20 billion in revenue this year.
“Imagine…in 2014, revenue from petroleum including taxes, royalties and dividends totalled about RM65 billion, but in 2015 it dropped to RM43 billion, hence the difference is over RM20 billion,” Johari said.
He said what was more worrying was that the oil price was expected to continue falling, and this would cause the country’s revenue to drop to RM30 billion in 2016.
Johari said even though the nation was badly affected by the fall in oil prices, the steps taken by the government to rationalise subsidies and implement the Goods and Services Tax to replace the Sales and Services Tax had enabled it compensate the shortfall. – BERNAMA