Budget 2023: Income tax down for M40, up for those earning above RM100k annually
KUALA LUMPUR, Feb 24 — Residents earning between RM35,000 and RM100,000 annually will have their personal income tax rate lowered by two percentage points under Budget 2023.
Prime Minister Datuk Seri Anwar Ibrahim said the government realised it has not provided much for the country’s middle income M40 group as the focus has been on assisting the B40 and hardcore poor in recent years.
"The B40 group has been given all kinds of aid while the middle group, the M40 group, showed patience despite their struggles due to the rising cost of goods.
"The government has decided to reduce the M40 income tax, so, in 2023, residents will pay two percentage points less in income tax, which is expected to save them around RM35,000 to RM100,000 ringgit.
"We expect this reduction will benefit around 2.4 million taxpayers and will free up about RM1,300 for them," he said today when tabling Budget 2023.
At the same time, the government will raise the tax rate of those earning between RM100,000 and RM1 million by 0.5 to 2 percentage points, depending on their income brackets.
However, Anwar said this increase will only affect less than 150,000 tax payers.
"The government will lose around RM900 million through these initiatives to benefit the M40 group," he added.
* A previous version of the report contained an error on the rate of tax reduction that has since been corrected