TAX RELIEFS

The PM is going to table the new budget soon in the Parliament in the next couple of days. I take it the budget will not be satisfying to everybody i this trying time of world economic slowdown and uncertainty of local politics.

However, i like any other tax payers in this country would wish for certain things to be revised in our favor. One of the main grouses is the tax relief of RM1000 per children per year. For so many years i could not comprehend how in the world the government come up with this figure which translated into Rm83.33 to take care of a kid per month! Did they use parameters from the 70's era for prices related to kid's food, clothing, diapers and medical treatment or they just plucked it from the sky and hope for the Rakyat not complaint about it? Yesterday's news announced that inflation has risen to 8.5% thanks to the petrol price increase as the main culprit which caused the domino effect on the rest of the items. Back to the cost of taking care of a kid nowadays without a maid involved, i am sure is more than RM250 a month which works out to be RM3000 a year! It is very easy to calculate and does not take a rocket scientist to do it.

Basically, a kid needs at least four cans of 22 ounces(medium size) per month, each costs around RM20 plus minus, and 4 packs of 32 or 2 packs of 60 pieces diapers per month which costs around RM60 to RM80, medical costs for clinic visit twice a month for about RM50 for basic treatment, clothing and miscellaneous cost around RM50 per month? This is applicable for kids up to maybe 4 years old. When they grow up, cost of clothing will increase as kids clothing are very expensive compares to adults. Then the cost for kindergarten, school uniforms, fees, books and so on.

Which brings me back to the RM83.33 per kid per month of tax relief given by the government, how in the world they came up with it? Did it come from a lonely economist who never married and experienced the headache of bringing up a kid, or an accountant firm who are not in touch with reality, or some smart politicians who prefer to have big saving in the government coffer regardless the hardship experienced by the Rakyat? Which is it? Dont they know that more money available for the people would generate the economy, help businesses which in return increase corporate tax collection by the government? I think this time they should consider revising the figure seriously, because if the cost of raising a family is deemed to be too expensive, Malaysia will one day end up like Singapore, because the new generation will be more comfortable with a small family size that they can afford. There will be shortage of local human resource eventually, and Malaysia will end up importing more foreigners to feed its industries. More foreigners means more headache with social ills and crime rate increases.

While at it, the government should also review personal relief of RM8000 per year per person, especially with the inflation rate has increased to 8.5% this year. Those living in big cities suffer the most with over dependency on personal vehicles to commute to work as the public transportation system still not at its best. The petrol price hike is a killer, eventually the rental rates for housing accommodation will go up along with food items. Some have gone up already the day after the announcement. They also have to put up with numerous tolls just to come to work. Some companies give COLA to cope up with this, but if the COLA amount is also taxable what is the use? With the average salary increase of 5% per year in most companies, it is becoming more stressfull for those who work in big cities like KL to make ends meet. So, maybe the government should introduce a zone system whereby those who live in KL will get more tax relief than those who lived in small towns where the distance for commuting to work is closer, less toll to pay, cheaper parking rates and so on.

I think it is time for the goverment to feel the pain the people on the streets feel instead taking care of the big corporations interests only.