LIAM wants more tax relief incentives in Budget 2015

The Life Insurance Association of Malaysia (LIAM) has proposed that the government offer more tax relief incentives in Budget 2015 to promote financial planning among Malaysians.

"As the country progresses towards a high-income nation, it is important that the mindset of the people also transforms, and become more self-reliant in managing financial well-being," it said in a statement here today.

According to LIAM, the RM6,000 tax deduction on combined Employees Provident Fund (EPF) contributions and life insurance premiums, has not been revised for many years and has suffered inflation erosion.

The last revision was in the tax assessment year 2005 when the amount was increased from RM5,000 to RM6,000, it said.

To differentiate the two important elements of financial planning, namely, savings and protection, LIAM proposes that the tax deduction be made separately for EPF contributions and life insurance premiums.

It wants a separate RM6,000 tax relief for EPF contributions and life insurance premiums.

LIAM has also proposed that the tax relief for medical and education insurance premiums be increased from the current RM3,000 to RM6,000 as the amount is insufficient in most circumstances.

"For example, for an average family of two adults with three children, the cost of medical insurance is around RM2,500 per annum at the lower end, which leaves only about RM500 per annum premium for savings, towards the education of the children.

"This amount is grossly insufficient and the people will feel the pinch even more with the increase in healthcare spending," it said.