KOTA KINABALU: Policymakers must tailor income bracket classifications according to each region's unique situation, says the Sabah Law Society (SLS).
Its president Mohamed Nazim Maduarin said the government must "keep it real" when deciding on criteria for the T15, T20, M40 and B40 brackets so that the classification is fair and effective, especially in light of Sabah's particular economic realities.
He said SLS acknowledged the introduction of the T15 tier in Budget 2025 to refine subsidy targeting, but income classifications must reflect the real economic conditions faced by households.
“We urge policymakers to ensure that these categories are not just theoretical and look good on paper, but based on realities faced by Malaysians, especially in Sabah,” he said in a statement on Tuesday (Oct 22).
“Simply put, the government must keep it real."
He said in Sabah, goods and services were consistently more expensive than in Peninsular Malaysia because of higher transportation and logistics costs.
Basic goods like cement, steel and food items cost more, impacting even those in the T15 and T20 income groups, he added.
For the B40 and M40, these price disparities worsen the financial strain already felt by these vulnerable groups, he said.
“The two-tier pricing system and the increased cost of living in Sabah make it necessary for income classifications to account for regional price differences and reflect... actual financial pressures... in Sabah and Sarawak,” he said.
Nizam said without this, the current classifications could misrepresent the challenges faced by Sabahans and lead to inadequate support across income groups.
As such, he said, the SLS urged the government to take a regionally adaptive approach to income classifications.
T15 denotes the top 15% of income earners with salaries from RM12,000 and above, though it differs from state to state.
When announcing Budget 2025 on Friday (Oct 18), Prime Minister Datuk Seri Anwar Ibrahim said there would not be any more education subsidies for those in the T15 community who enrol their children in fully residential schools and public higher education institutions.
He said the T15 group will face a “slight” hike in fees, and education subsidies will be gradually reduced for the bracket.
The B40 group represents the 40% of households nationwide that have a net income of below RM4,850 per month while M40 represents the 40% that have a monthly net income of between RM4,851 and RM10,960.
The T20 group denotes the 20% of Malaysian households that have an income of above RM10,960 monthly.
