Kuala Lumpur, 10 October 2014: The Life Insurance Association of Malaysia (LIAM) welcomes the measures and incentives announced in the 2015 Budget which will raise the standard of living of the rakyat. It is a very comprehensive and timely Budget that will help the rakyat to tide over the increase in the cost of living.

 

“We are happy the Government will allocate RM23.3 billion to look into improving the healthcare services and facilities for the rakyat.  The establishment of new hospitals, 20 health clinics and 30 1Malaysia clinics is most timely to provide a more affordable healthcare facilities for the rakyat, in the light of the rapid inflation in healthcare services.  Patients undergoing chronic haemodialysis treatment are also accorded with medication and additional dialysis machines in Government hospitals ,” said Vincent Kwo, President of LIAM.

 

“The increase in tax relief for treatment of serious diseases such as cancer, kidney failure and heart attack from RM5,000 to RM6,000 per year is most welcomed to relief the burden of families who are stricken with these critical diseases. LIAM hopes that the Government will also consider to raise the current tax relief for medical and education insurance per year from RM3,000 to RM6,000.  This will encourage individuals to purchase medical insurance to supplement the treatment provided by the Government,” added Vincent Kwo.

 

LIAM hopes that the Government will also introduce incentives to promote long term savings and protection.

 

The current taxation system provides a RM6,000 tax deduction on combined EPF contributions and life insurance premiums.  This incentive does not differentiate the two important elements of financial planning, i.e. savings and protection.

 

EPF is for the purpose of meeting long-term savings needs while life insurance is primarily for the purpose of financial protection with a secondary aim of long-term savings.  Financial protection will become increasingly important as we transform to a high-income nation as the loss of the income of the breadwinner of the family due to his/her untimely demise or incapacity would have an even greater impact on the surviving family with the increase in income.

 

“To achieve this aim, LIAM proposed that the tax deduction be made separately available for EPF contributions and life insurance premiums, i.e. RM6,000 tax relief for EPF contributions and a separate RM6,000 for life insurance premiums” added Vincent Kwo.

 

“LIAM also supports the implementation of the Goods and Services Tax (GST) next year which is a more equitable tax basis. As a caring Government, the RM4.9 billion channelled back to the rakyat through the increase in BRIM will bring great relief to the poorer segment of the rakyat,” added Vincent Kwo.

 

For the corporate sector and individuals, the introduction of GST will also benefit them as the Government in the form of reduced corporate and individual tax rate. All these measures will provide a strong foundation for Malaysia to progress to a developed nation status.

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