Waiving tax will lighten burden of those past 60, says economist

A tax waiver for those in the B40 and M40 groups working past the age of 60 will allow them to save for their retirement, says economist Zahariah Sahudin. (Feepik pic)

PETALING JAYA: Waiving income tax for members of the B40 and M40 groups working beyond the age of 60 would go a long way to alleviating their financial burden, says an economist.

Zahariah Sahudin of UiTM Puncak Alam’s business and management faculty said older Malaysians are projected to make up 15% of the population in 2035, from 7% presently.

She said waiver of income tax, which would allow them to save for retirement, is unlikely to dent the country’s finances substantially as these senior citizens represent only a small percentage of the population and labour force.

“At this age, they don’t have social protection from the Social Security Organisation (Socso) anymore.

Zahariah Sahudin.

“If anything happens to them, they would have to pay hospital bills on their own, and that’s why they would need extra money. The older they are, the likelihood of being ill increases,” Zahariah told FMT.

On Feb 7, Social Protection Contributors Advisory Association Malaysia president J Solomon urged the government to implement the policy to lighten the burden of senior citizens.

He said Prime Minister Anwar Ibrahim had previously admitted that 71% of active EPF contributors do not have enough money to retire.

The proposal would help individuals to have more disposable income, said Solomon.

Yeah Kim Leng.

Yeah Kim Leng of Sunway University said the proposal aligns with the government’s intention to ensure citizens have adequate retirement savings.

“Given that only those aged above 60 are eligible, it will likely have minimal impact on the government’s yearly tax collection,” he said.

Yeah said such a policy would need to be supplemented by a revision to Socso guidelines to ensure coverage for the entire working population, irrespective of age.