KUALA LUMPUR: Budget 2016 should restructure taxes to help middle-income households cope with the rising cost of living, says MCA president Datuk Seri Liow Tiong Lai.
He said the party had proposed, among others, to increase the personal relief of RM9,000 and the child relief of RM1,000 to help ease the increasing financial pressure on this group in particular.
“We also proposed a substantial reduction in personal tax.”
For instance, he said, the tax percentage for those with a RM100,000 household income a year was high.
“Actually, a household income of RM10,000 a month, like a husband and wife earning RM5,000 each which adds up to RM120,000 a year, does not give the family much spending power after tax.
“The rising cost of living has put a lot of pressure on middle-income families these days.
“Parents also have many financial commitments as well in bringing up their families, especially those living in urban areas,” he said during a media interview on Tuesday.
Liow noted that the unfavourable economic scenario coupled with the 6% Goods and Services Tax (GST) had further compounded the people’s financial woes.
As such, he said the impact from the GST on the people should be factored in when restructuring the individual income tax in the upcoming budget.
Meanwhile, Liow said the high cost of living in cities had resulted in many young people wanting to return to their villages to eke out a living.
“MCA is coming up with plans on business and job opportunities to develop villages.
“Those who return from the cities together with those remaining in the village can join hands to tap the opportunities,” he said, adding that the availability of land in or near villages had good potential for activities like modern farming and eco-tourism.
Liow said the party had made study trips abroad to see how villages were successfully developed, the latest one being to China last month.
There are some 600 villages, with more than 450 new villages, in Malaysia.
Liow said many new villages were also getting nearer to cities because of development.
– The Star