No plans to review tax relief for insurance policies

The Star

3 days ago

THERE is no intention to review the tax relief amounts for personal and life insurance policies, even as the government is continuously improving the income tax reliefs eligible for individual taxpayers through a targeted approach and special reliefs, says Finance Minister Datuk Seri Anwar Ibrahim.
'Through Budgets 2023, 2024 and 2025, a targeted approach has been implemented by increasing the tax relief amounts for medical treatment expenses, child care allowances, persons with disabilities, and education and medical insurance.
'Besides increasing the eligible tax relief amounts, the government, through Budget 2025, has also expanded the scope of existing tax reliefs, such as extending care and treatment for parents to include grandparents and broadening the scope of health screenings to include the purchase of self-examination health equipment and fees for disease detection tests,' he said in a written parliamentary reply.
Earlier, Datuk Seri Dr Wee Ka Siong (BN-Ayer Hitam) had asked the Finance Ministry whether it will review the reliefs associated with personal and life insurances that remained at RM9,000 and RM3,000, respectively, for the past 15 years.
Dr Wee, who is also MCA president, said the tax relief amount did not reflect the effects of inflation and the current cost of living.
Anwar also said the government introduced special reliefs for specific purposes under Budget 2025. This included relief on interest payments for housing loans for the purchase of the first residential home.
'Through this relief, the purchase of a home priced up to RM500,000 qualifies for a tax relief of up to RM7,000, while a tax relief of up to RM5,000 can be claimed for the purchase of a residential home priced between RM500,001 and RM750,000,' he added.
Anwar also said other improvements to tax reliefs for individuals include reducing the tax rate by 2 percentage points for the taxable income range between RM35,001 and RM100,000 starting from the assessment year 2023.
'This tax rate reduction can provide an additional disposable income of up to RM1,300 per year for about 2.4 million taxpayers, including the middle-income group.
'In addition, the government is committed to improving tax administration and services to enhance efficiency and service levels for taxpayers,' he said.
Anwar also said that any future reviews or revisions to income tax rates or individual tax reliefs need to be conducted carefully to avoid jeopardising the country's fiscal position, adding that any changes in tax policy must also align with international taxation practices and not adversely affect the country's global commitments.