KUALA LUMPUR (Feb 24): Middle-income earners, more commonly known as the M40 group, were specifically mentioned in the revised Budget 2023, as they are also bearing the brunt of the rising cost of living, besides the B40 group.
The most significant proposal affecting the M40 in the revised budget is the two percentage point cut in personal income tax for those in the RM35,000 to RM100,000 taxable income band, starting this year.
This is expected to increase the disposable income of an estimated 2.4 million taxpayers by up to RM1,300, said Prime Minister Datuk Seri Anwar Ibrahim during the tabling of the revised Budget 2023 in Parliament on Friday (Feb 24).
Anwar also announced an increase in tax relief for medical expenses, from RM8,000 to RM10,000, starting from the year of assessment 2023.
Additionally, the scope of this tax relief will be expanded to include rehabilitation of neurodevelopmental disorders such as autism, Down syndrome and specific learning disabilities, but limited to RM4,000.
For those who are still repaying their student loans under the National Higher Education Fund Corp (PTPTN), Anwar said the government has agreed to provide a three-month PTPTN discount of up to 20% starting in March.
The government has also agreed to provide a six-month moratorium on PTPTN repayments for those earning less than RM1,800 a month.
To encourage equity holdings among Bumiputera, Anwar said the limit for individual investment in Amanah Saham Bumiputera (ASB) and ASB2 will be increased to RM300,000, from RM200,000 previously.
“This administration also agreed to increase the Amanah Saham Malaysia’s fund size to RM5 billion,” said Anwar.
On retirement savings, the government has proposed to raise the limit of voluntary contribution to Employees Provident Fund (EPF) to RM100,000 from RM60,000 annually, and the limit of matching contribution by the government to RM300 from RM250 previously.
Voluntary EPF contributions will also be entitled to up to RM3,000 in tax relief for EPF contribution or life insurance premiums.
Real estate owners who intend to transfer their ownership by way of love and affection, to spouse or family members for example, will be given a full waiver on stamp duty for the first RM1 million of the property value.
The remaining real estate value will also be given 50% remission, effective for deed of transfer of ownership signed after April 1 this year.
For public transport users, the government will maintain the My50 monthly unlimited travel pass on Rapid KL services like Light Rail Transit, Mass Rapid Transit, Monorail, Rapid KL buses in Klang Valley.