The goodies in Budget 2016 are aimed at easing the financial burden of low and middle income groups, and complement existing tax reliefs, says a tax consultant.
Many middle income earners have been telling the media that they are dissatisfied with the Budget, claiming they will benefit the least from it.
Consultant Koong Lin Loong, who is also a Finance Ministry Goods and Services Tax working committee member, disagrees with such views, urging the people not to have a “microscopic” view of Budget 2016.
“Many people misunderstand (the Government’s efforts).
“In order to have the full picture, a budget cannot be read a year by itself.
“It has to be studied as a continuation of past budgets,” he said.
He noted that Budget 2015 offered first-time buyers who opted for the 1Malaysia People’s Housing Programme a loan of up to 105%, while stamp duty was waived.
These benefits can still be enjoyed next year, he said.
Koong, who has been an auditor and tax consultant the past two decades, is a national council member of Malaysia’s Institute of Taxation.
He noted that the tax relief for each child below 18 has been increased by 100% for 2016, up from RM1,000 to RM2,000.
“The previous adjustment was in 2004 ,” he said.
Koong reminded the public that this year’s budget had cut personal income tax by 1% to 3% and this was still applicable next year.
Coupled with various tax reliefs announced this year, he said the M40 group – those earning between RM3,860 and RM8,319 – would see a reduction of RM500 to RM600 in tax payable.
“The middle income group does not receive BR1M but this is a kind of ‘indirect BR1M’.
“To me it is free money which increases their disposable income,” he said, referring to the government scheme to ease the burden of the low income group.
MCA deputy president Datuk Seri Dr Wee Ka Siong also sees that Budget 2016 is aimed at “lifting the financial pressure” off the middle income group.
“In MCA’s proposal to the Cabinet, our first highlight was about giving more tax relief to this group.”
“Our Prime Minister and Finance Minister Datuk Seri Najib Tun Razak has heeded our recommendations,” he said during his opening speech at the Malaysian Economic Outlook seminar on Sunday.
Source – The Star 28 October 2015