17th March 2023 - 2 min read
Malaysian parents who save with the Skim Simpanan Pendidikan Nasional (SSPN) may no longer be able to enjoy the RM8,000 tax relief that has been made available thus far. This comes as the government is proposing to amend the Income Tax Act 1967 with the Finance Bill 2023, following the re-tabling of Budget 2023 that did not include an extension to this tax relief.
As seen in the Finance Bill 2023, one of the amendments that will be introduced include:
Subparagraph 4(a)(iv) seeks to delete paragraph 46(1)(k) of Act 53 as the amount deposited by an individual for his child into the Skim Simpanan Pendidikan Nasional shall no longer be allowed as a deduction under Act 53. This amendment has effect for the year of assessment 2023 and subsequent years of assessment.
Meanwhile, SSPN itself noted on its website that it is currently seeking clarification from the government on this matter, and will update when it has obtained new information.
The tax relief offered for saving with SSPN has undeniably been one of the key incentives that encouraged depositors to save with SSPN to their children’s accounts, as the RM8,000 relief – in addition to the interest rate offered and accompanying loyalty campaigns – adds up to quite a substantial amount. Prior to 2019, the tax relief for SSPN deposits was limited to RM6,000, before it was subsequently increased to RM8,000 under Budget 2019.
Meanwhile, the Finance Bill 2023 has been presented by Deputy Finance Minister 2, Steven Sim Chee Keong for its first reading. It will need to go through a second and third reading before it can be passed. Other amendments that were also proposed in the Finance Bill 2023 include amendments to the Real Property Gains Tax Act 1976 and the Stamp Act 1949.
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