THE HEALTH | MARCH-APRIL , 2023

Tax policies could play an instrumental role in promoting a healthy lifestyle among Malaysians – with various tax policies implemented over the years to achieve these objectives .

TAX RELIEFS TO ENCOURAGE A HEALTHIER LIFESTYLE

As individual taxpayers , there are several tax reliefs that residents of Malaysia could avail of . Broadly , the currently available tax reliefs – i . e . for Year Assessment ( YA ) 2022 – related to health and well-being are encapsulated as follows :

Type of tax relief Amount ( RM )

Medical treatment , special needs , and carer expenses for parents ( Medical condition certified by a Up to 8,000 medical practitioner )

Medical expenses for serious diseases for self , spouse , or child

Vaccination expenses for self , spouse , and child . Types of vaccines that qualify for deduction are as follows : Pneumococcal ; Up to 8,000 Human papillomavirus ( HPV ); ( aggregate ) Influenza ; Rotavirus ; Varicella ; Meningococcal ; TDAP combination ( tetanusdiphtheria-acellular-pertussis ); and Coronavirus Disease 2019 ( Covid-19 ). ( Restricted to RM1,000 )

i ) Complete medical examination for self , spouse , and child as defined by the Malaysian Medical Council ( MMC ). ii ) Covid-19 detection test including the purchase of a self-detection test kit for self , spouse , and child . ( Restricted to RM1,000 )

Lifestyle – Expenses for the use / benefit of self , spouse , or child in respect of , among others , purchase of sports equipment Up to 2,500 for sports activity defined under the Sports Development Act 1997 and payment of gym membership

Additional lifestyle tax relief related to sports activity expended by that individual for the following : i )

Purchase of sports equipment for any sports activity as defined under the Sports Development Act 1997 ( excluding motorised two-wheel bicycles ); ii ) Payment of rental or entrance fee to any sports facility ; and iii ) Payment of registration fee for any sports competition where the organiser is approved and licensed Up to 500 by the Commissioner of Sports under the Sports Development Act 1997 .

Purchase of supporting equipment for self ( if a disabled person ) or for Up to 6,000 a disabled spouse , child , or parent

Premium for insurance on education or medical benefits Up to 3,000

Many Malaysians were found to have mental health problems according to the National Health and Morbidity Survey 2019 ( NHMS 2019 ). To address the rising mental health problems among Malaysians , effective from YA 2022 , the scope of qualifying expenses ( restricted to RM1,000 ) for medical examination above has been expanded to include expenses incurred on mental health-related checkups or consultation services from : a . Psychiatrists registered with the Malaysian Medical Council under the Mental Health Act 2001 ( Act 615 ); b . Clinical psychologists registered with the Malaysian Allied Health Professions Council under the Allied Health Professions Act 2016 ( Act 774 ); or c . Counselors registered with the Board of Counselors Malaysia under the Counselors Act 1998 ( Act 580 ). In the recent Budget 2023 ( re-tabled ), it was proposed that the scope of qualifying expenses ( restricted to RM4,000 ) be expanded to include intervention expenditure for Autism , Attention Deficit Hyperactivity Disorder , Global Development Delay , Intellectual Disability , Down Syndrome and Specific Learning Disabilities provided that : a . The diagnostic assessment is certified by a medical practitioner registered with the Malaysian Medical Council ; b . The early intervention and rehabilitation programme is conducted by a health professional practitioner registered under the Allied Health Profession Act 2016 . With the expanded scope above , which is expected to be effective from YA 2023 , the aggregate amount of tax relief for medical treatment expenses is proposed to be increased from RM8,000 to RM10,000 . While tax reliefs would incentivise Malaysians to inhabit a healthy lifestyle , they are claimable only to the extent of the chargeable income of an individual taxpayer . This would mean that certain low or middle-income groups may not be able to fully enjoy the tax reliefs . Instead , the government may consider providing cash aid or subsidies targeted at

BY NIK FAIZIMAN AFFANDI

healthcare to benefit the wider public .

For every tax relief claimed , taxpayers must be ensured to keep the supporting documents , such as expense receipts , for at least seven years from the year of tax filing in the event of an audit by the Malaysian Inland Revenue Board ( MIRB ).

INDIRECT TAX MEASURES TO CURB UNHEALTHY LIFESTYLE AND SMOKING PREVALENCE

The NHMS 2019 survey also found that one in two adults in Malaysia was either overweight or obese . To address issues of obesity , diabetes , and other noncommunicable diseases associated with nutrition , an excise duty of RM0.40 / liter is currently imposed on several categories of ready-to-drink sugar-sweetened beverages ).

In addition , it was proposed that the scope of excise duty for sugar-sweetened beverages be expanded to include pre-mixed preparations of chocolate or cocoa , malt , coffee , and tea , such as “ 2-in-1 ” and “ 3-in-1 ” pre-mixed beverage sachets . However , the initial implementation date of April 1 , 2022 has been deferred .

The levy imposed on sugar-sweetened and pre-mix beverages should affect Malaysians ’ purchase decisions which may lead to reduced consumption of these beverages . However , there will still be demands for such beverages by a certain group of people ( e . g ., coffee may be a necessity for some people and pre-mix coffee may be more affordable than artisan coffee ). Taking this into account , the government should constantly review and adjust the levy accordingly with regard to inflation .

In the government ’ s effort to reduce smoking prevalence among Malaysians , it was proposed from Jan 1 , 2021 onwards , a 10 per cent ad valorem excise duty is imposed on all cigarette devices ( electronic or non-electronic ). In addition , an excise duty of RM0.40 / milliliter of vape liquid is also imposed . A sales tax of 10 per cent on cigarette and tobacco products sold on all duty-free islands and in any free zones was also imposed beginning Jan 1 , 2021 .

In addition , it was proposed in Budget 2023 ( re-tabled ) that the import duty and sales tax on nicotine replacement therapy products be exempted for a period of three years for applications received from April 1 , 2023 to March 31 , 2026 .

In summary , healthcare-related tax policies may be used to influence consumer behaviour – but their effectiveness in encouraging Malaysians to adopt a healthier lifestyle would ultimately depend on awareness and implementation . – The Health

Nik Faiziman Affandi is Associate Director – Corporate Tax at KPMG Tax Services Sdn Bhd