KUALA LUMPUR (Oct 23): Budget 2016 showed that the government cares not only about the bottom 40% household income group (B40) but also the middle 40% household income group (M40), said Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi.

M40 denotes households with monthly income ranging between RM3,860 and RM8,320.

For the first time, the budget has made provision for tax relief for children who provide for their parents. For instance, the tax relief for each child below 18 years of age is increased from RM1,000 to RM2,000 from year of assessment 2016, while that of individual taxpayer whose spouse has no income is increased from RM3,000 to RM4,000.

Currently, individual taxpayers are given tax relief up to RM5,000 per year for medical treatment and care of parents who are ill.

""This budget shows that the government is also concerned about the middle
income group where the tax deductions which is shown in the take-home pay of
this group is higher compared with last year's budget," Ahmad Zahid told a press conference at the Parliament lobby today. 

"By giving focus to both these groups (B40 and M40), the high income group has to pay higher taxes. This means that there is income distribution from the higher-income group in order to protect the interests of the middle-income and
lower-income groups," he added.

Prime Minister Datuk Seri Najib Razak had earlier tabled the budget to Parliament.

Under Budget 2016, for the first time, children who provide for their parents are given total tax relief of RM1,500 for the mother and RM1,500 for the father. The relief is subject to the condition that each parent does not have income exceeding RM2,000 a month and must be 60 years and above.

The government has also increased the tax relief from RM6,000 to RM8,000 for each child above the age of 18 years who is studying at a local or foreign institutions of higher learning, from year of assessment 2016. 

Additionally, the tax relief for disabled child above the age of 18 years who is studying at local or foreign institutions of higher learning has been increased from RM6,000 to RM8,000, from year of assessment 2016.

Asked whether the opposition's claim that the budget tabled today was aimed at winning the Sarawak elections due early next year, Ahmad Zahid said:  "Very positive comment from them. It is indeed."

Under Budget 2016, a total of RM29.2 billion has been allocated for development in Sabah and Sarawak, covering a range of benefits.