The government has no current plans to revise the tax relief amounts for personal and life insurance policies, according to Finance Minister Datuk Seri Anwar Ibrahim. While these amounts have remained unchanged for over a decade, the minister said that efforts to improve tax reliefs are ongoing through targeted measures and special provisions introduced in recent national budgets.

Targeted Improvements Through Recent Budgets

In a written reply to Parliament, Anwar explained that Budgets 2023, 2024, and 2025 have focused on a targeted approach to income tax reliefs. This includes increases in relief amounts for medical treatment, child care, persons with disabilities, and education and medical insurance.

Under Budget 2025, the scope of certain reliefs has also been expanded. For example, the care and treatment relief for parents now includes grandparents. Additionally, the health screening category now covers self-test health kits and fees for disease detection tests.

Existing Insurance Reliefs Remain Unchanged

The current tax relief for individuals and dependents is RM9,000, a figure that has remained unchanged for the past 15 years. In addition, insurance-related tax reliefs include up to RM3,000 for life insurance premiums (primarily for civil servants) and RM3,000 for education and medical insurance. In a parliamentary question, Ayer Hitam MP Datuk Seri Dr Wee Ka Siong asked whether the Finance Ministry would consider reviewing these figures in light of inflation and rising living costs.

In response, Anwar confirmed that there are no plans at this stage to revise these amounts. Instead, the government is focusing on refining other areas of tax relief that offer more targeted support.

If you are reviewing your insurance needs, you can compare term life insurance plans, browse medical card options, or learn more with our Insurance 101 guide on RinggitPlus.

New Relief for First-Time Homebuyers

Budget 2025 also introduced a new relief for first-time homebuyers. Individuals purchasing a residential property priced up to RM500,000 are eligible for income tax relief of up to RM7,000 on interest payments for housing loans.

For homes priced between RM500,001 and RM750,000, the relief amount is capped at RM5,000. This initiative is intended to ease the financial burden on new homeowners, especially within the middle-income group.

Tax Rate Reduction for Middle-Income Earners

As part of the broader tax restructuring efforts, the government reduced the personal income tax rate by two percentage points for the income band between RM35,001 and RM100,000. This change, effective from the 2023 assessment year, is expected to benefit around 2.4 million taxpayers.

According to Anwar, this measure could increase disposable income by up to RM1,300 per year for eligible individuals, providing meaningful relief to middle-income households.

Careful Consideration for Future Tax Reforms

Looking ahead, Anwar stated that any changes to personal income tax rates or reliefs must be evaluated carefully. He stressed the importance of balancing tax policy with the country’s fiscal health and international obligations.

Any future adjustments, he said, must align with global taxation standards and avoid placing Malaysia’s fiscal position at risk.

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• TAGS:
• Anwar Ibrahim
• Personal Insurance
• Targeted Subsidies
• Tax Rate Reduction
• Tax Reliefs
• Taxes