KUALA LUMPUR:BR1M, set to continue in 2016 at an increased sum, still remains the most efficient way of putting money in the pockets of the low-income group where fiscal measures will not be as effective, says Pricewaterhouse Coopers Malaysia.
Tax leader Jagdev Singh said for the middle-income group, the increase in the various personal tax reliefs proposed under the 2016 Budget will help reduce their tax bill.
However, the high-income group will have to fork out a greater proportion of their income as taxes.
The government continues to emphasise on SMEs' key role in contributing 41 per cent of the Gross Domestic Product (GDP) by 2020 with an additional RM1 billion in government subsidised financing schemes and various other programmes including flexibilities on tax incentive conditions.
"However, a much-hoped icing on the cake in terms of even lower tax rates compared to the 19 per cent was visibly missing," he added.
The special reinvestment allowance to encourage reinvestments in the short term will help boost the sluggish sentiments among manufacturing companies in terms of expanding or diversifying their operations.
However, he said given the fierce competition for investments, a more holistic review of incentives is timely as a game changer to take it to the next level.