FINANCE Minister Anwar Ibrahim announced a reduction in personal income tax on the middle-income group, which will increase their disposable income.

He also announced an increase in individual income tax for high-income earners in a restructuring of taxation, which he described as “progressive”.

“Starting from 2023, the income tax rate for resident individuals will be reduced by 2% involving an income range of between RM35,000 and RM100,000,” he said when tabling the revised Budget 2023 in the Dewan Rakyat today.

The income tax reduction is expected to provide an excess of disposable income of up to RM1,300 to about 2.4 million taxpayers.

For those with high income in the range of more than RM100,000 to RM1 million, the tax rate on them will be increased between 0.5% and 2%.

“However, fewer than 150,000 taxpayers will be subject to higher taxes,” said Anwar.

He said the restructuring of the tax rate will reduce the government’s tax revenue by RM900 million but will benefit the people, especially the M40.

In his speech, Anwar expressed his appreciation for the M40 group who has so far shown a high level of patience despite being squeezed by the increase in the cost of living.

He admitted that this group always felt left out when the government focused on dealing with the low-income group.

Under Budget 2023 presented by the previous government on October 7 last year, income tax for the taxable income group of between RM50,001 to RM100,000 was reduced by 2% for the assessment year 2023.

It was lowered from 13% to 11% for RM50,001-RM70,000 and from 21% to 19% for RM70,001-RM100,000.

Tax for those earning between RM250,001 and RM400,000 was increased from 24.5% to 25%. – February 24, 2023.