29th March 2023 - 3 min read
Prime Minister Datuk Seri Anwar Ibrahim said that the government has now agreed to extend the tax relief for Skim Simpanan Pendidikan Nasional (SSPN) deposits until 2024, following public complaints after it was indicated earlier that the relief will be discontinued starting from this year.
In a Twitter post, Deputy Finance Minister I, Ahmad Maslan said that this update was announced today, during the first reading of Budget 2023 in Dewan Negara by Datuk Seri Anwar, who is also the Finance Minister. It is expected to benefit 400,000 taxpayers, most of whom fall within the M40 and T20 income group.
Ahmad Maslan further highlighted that this reversal of the decision will cost the government an estimated loss of RM250 million in tax revenue.
Prior to this, Deputy Finance Minister II, Steven Sim had come forward to confirm that the government had decided not to extend the SSPN tax relief as several other tax exemptions and deductions were already introduced under the revised national budget. These include a 2% cut in the individual income tax rate for selected income brackets and an increase in tax relief for medical expenses. Additionally, the National Higher Education Fund Corporation (PTPTN) also reintroduced a repayment discount of up to 20%, along with a loan repayment moratorium for those who earn less than RM1,800.
Meanwhile, the chief executive officer of the Inland Revenue Board (LHDN), Datuk Dr Mohd Nizom Sairi said that taxpayers can voice out their dissatisfaction with the discontinuation of the SSPN tax relief to the government. He also stressed that LHDN is only responsible for implementing decisions made at the policy level by the government.
Several other politicians, too, voiced their disagreement with the government’s decision to discontinue the tax relief, stating that the SSPN tax relief is an important policy for parents. These include Datuk Seri Dr Wee Ka Siong, Syed Saddiq, and Datuk Wan Saiful Wan Jan.
The SSPN tax relief of up to RM8,000 has been provided to the public over the past few years, and has served as one of the key incentives to encourage parents to save with SSPN (under their children’s name) for their children’s education. This is on top of other advantages, such as the interest rate offered and bonuses via loyalty campaigns. This tax relief was, however, left out of the revised Budget 2023 when it was retabled in February 2023.
(Sources: Bernama, Steven Sim)
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