GEORGE TOWN: The distribution of subsidies must be done in a way to benefit the needy, especially those living below decent wages. Citing an example, manager V. Predeep, 39, said a family with a household income of RM12,000 should not fall under the T20 bracket if the taxpayer had to look after his or her parents and at least five children.
“The taxpayer also has to pay car and housing instalments, besides putting food on the table for the children and parents.
“This is the mismatch under the current income classification that cut off assistance for the needy,” he said.
Predeep said car prices should be reduced so that the total household commitment could be reduced.
The father of three said subsidies should also be given to those with poor credit score, as depriving them of subsidies could lead to a default in serving their monthly loan commitments.
Businessman Ong Swee Jin, 48, said a proper mechanism must be in place so that the people could reap the benefit of the government’s taxation or new subsidies.
“As we are aware, most of the population falls under the M40 group. They contribute the most to the country’s coffers via income tax.
“If we phase them out from subsidies, it would put them in a tight spot. Many lost their jobs over the pandemic and they have since become B40,” he said.
Hotel worker Abdul Shukor Hamid, 34, said he welcomed the proposed targeted subsidy approach by the government.
“The new mechanism must be able to detect any abuse in the system, as we don’t want certain people to enjoy the benefits that he or she is not entitled to in the first place,” he said.
Universiti Sains Malaysia economist Dr Abdul Rais Abdul Latiff said introducing new targeted subsidies is a good move, adding that they must be properly implemented.
He said the ministry must focus on providing the right subsidy to the targeted group.
“If we look into the subsidy now, we are seeing a market distortion.
“In the Malaysian tax structure, the M40 group formed the largest percentage in the population in paying income tax and indirect taxes such as sales and services tax, and others.
“In the meantime, the T20 group could get exemptions such as corporate tax as this group of people who are mostly businessmen will be getting waiver under the business tax.
“If the government wants to implement a new approach, it must look into who should get the subsidy and who are not eligible,” he added.
