Sim: New tax rate only for taxable income above RM230,000 per year

 

The increased income tax rate only affects those earning taxable income above RM230,000 per year, Deputy Finance Minister II Steven Sim clarified today.

This roughly works out to RM19,166.67 per month in taxable income.

This came after Prime Minister Anwar Ibrahim said in his Budget 2023 speech on Friday that those in the RM100,001 to RM250,000 income tax bracket and above would be subject to increased rates of 0.5 percent to 2 percent.

This was initially understood by some to mean that those earning above RM8,000 in taxable income would also be affected.

However, Sim (above) explained that because of how the income tax is structured, only those earning above RM230,000 would be subject to the increased rates.

Sim said taxpayers earning less than RM230,000 may even save up to RM1,000 thanks to the 2 percent cut in income tax for the M40 group.

A table by the Finance Ministry - released after the budget speech - showed that for those who will have to pay 0.5 percent extra on their income tax, it would at most come up to RM200.

Taxpayers in the RM1-2 million tax bracket, meanwhile, will have to pay up to RM10,950 in additional income tax.

The increased income tax on the wealthy is meant to be part of the government’s progressive taxation efforts.

"The last revision to our tax rate was almost a decade ago in 2015," Sim said in a statement today.

"We must aim at a more equitable taxation, one which does not burden the people but at the same time supports the nation's development," he added.

In a related Facebook post yesterday, Sim said he understood that for those living in urban areas in Selangor, Kuala Lumpur, Johor Bahru, and Penang - even a salary of around RM10,000 may not be enough due to the high cost of living and financial commitments. - Mkini