Two pct reduction for M40 income tax, increase for high-earners

 

Individual income tax for the M40 (middle 40 percent of income earners) group will be lowered by two percent starting this year, said Prime Minister Anwar Ibrahim.

This lowered tax rate will cover those in the income range between RM35,000 and RM100,000 per annum.

On the other hand, the tax rate will be increased for those earning more than RM100,000 up to RM1 million, including some MPs, Anwar said.

The increase affecting these high-income groups will be between 0.5 to two percent.

“However, fewer than 150,000 taxpayers will be affected by the higher tax rate,” said Anwar during the tabling of Budget 2023 in the Dewan Rakyat today.

With this, the government will see a reduction of RM900 million in tax revenue for the benefit of the people, specifically the M40 income group, he added.

The move to lower the tax rate for the M40 is to increase their disposable income, the finance minister explained.

“All this while, the B40 group have often been given all sorts of help while the group in the middle, the M40, have been patient even though they have also been squeezed by the crippling rise in the cost of living.

“The government agreed that increasing the M40’s disposable income through the lowering of individual income tax rate can benefit them,” Anwar said.

Earlier in his budget speech, Anwar said the government will be introducing a luxury goods tax which will come into force this year.

He said this is part of progressive efforts to tax those who are well off. - Mkini