Budget 2023: Two-per cent income tax reduction for M40, benefits 2.4 million tax payers
KOUSALYA SELVAM HAJAR UMIRA MD ZAKI
KUALA LUMPUR - The income tax deduction for those in the middle 40 (M40) income group will be reduced by two per cent, says Prime Minister Datuk Seri Anwar Ibrahim.
He, who is also Finance Minister, said the tax reduction is aimed at helping the M40 group with the rising cost of living as well as increasing their disposable income.
"It is with great pleasure to announce that the government has agreed to increase the M40's income through the reduction of individual income tax.
"Starting this year, the individual income tax rate will be reduced by two percent for those earning between RM35,000 and RM100,000 per annum.
"This reduction is expected to benefit approximately 2.4 million taxpayers with disposable income up to RM1300," he said when re-tabling the Budget 2023 at the Dewan Rakyat today.
Anwar further explained that the government will raise tax rates for those with high incomes.
"As I have explained, the government will take a progressive approach. "While the M40 benefits from tax reduction, the government will also raise tax rates for those with high incomes by 0.5 to 2 percent for those with incomes over RM100,000 to RM1 million.
"However, fewer than 150 thousand taxpayers will be subjected to these high taxes. "Through this approach, it will help reduce the government's net tax revenue by RM900 million for the benefit of people, especially M40," he said.
