Unreasonable to terminate SSPN tax relief when it encourages parents to save & finance their children’s higher education

It is inappropriate of the government to suddenly announce the discontinuation of the tax relief of up to RM8,000 per year for taxpayers who have deposited with the National Education Savings Scheme or Skim Simpanan Pendidikan Nasional (SSPN). In view of the uncertain economic prospects at home and abroad and foreign currency exchange, many parents still need this relevant benefit.

The government could consider lowering the relief, or extending it for a grace period of another year or two, rather than making a sudden announcement which caught contributors off guard.

At a time when the National Higher Education Fund Corporation (PTPTN) has accumulated debts, the government should encourage parents to save to finance their children’s higher education. Reducing the pressure on PTPTN whilst encouraging parents to plan for their children’s future is a healthy and constructive move.

Deputy Finance Minister II Steven Sim had announced that the government will not extend the personal income tax relief for SSPN deposits starting this year. This comes as the re-tabling of Budget 2023 did not include an extension to this tax relief.

According to records, PTPTN launched the SSPN scheme in 2004, and allowed the opening of SSPN-i accounts for PTPTN loans in 2012, as well as the upgrade to SSPN-i Plus in 2015. Furthermore, from 2007 onwards, the scheme also provided personal income tax relief up to RM3,000; this figure was further raised to RM6,000 after the Budget 2016 was passed. In Budget 2019, the tax relief was raised to RM8,000 annually.

Over the past few years, SSPN has always been popular with taxpayers, because, in addition to the attractive income tax relief of up to RM8,000, its interest rate of 3% to 4% is generally higher than those of fixed deposits offered by banks; As of 30 Nov 2022, SSPN had 5.68 million depositors.

Other measures such as personal income tax relief and tax cuts offered by the government, and even a moratorium on PTPTN loan repayments should not be mixed with the SSPN tax reliefs as it is a plan for parents to save for their children’s future.

-MCA online-