Tax on savings of low income earners

THE government is collecting taxes on the savings and pension schemes of low and very low earners whose income is tax-free, eating away at what are often their only asset accumulated through a lifetime of hard work. What is ridiculous is that many of these people have to pay 15% of the profits on savings as advance income tax since 2012 because they do not have a TIN, and they don't need to have one, as opposed to 10% for those who do.

Small savers are already in a vulnerable position as their savings are being hit hard by inflation and low interest rates particularly affecting poor, old, retired and physically and mentally challenged people, who, in the absence of a social security system, only have their savings to fall back on. If the government takes away an additional 15% from the meagre profit earned, what are these people left with?

In a country where the rich consistently get away with tax evasion, we see no justification for taxing people whose income falls well below the tax-free ceiling. We urge the government to consider a minimum threshold for taxation on low income earners' savings, especially as it only stands to lose 4% of overall advance income tax if small savers are given tax waiver.

In addition, the government should reassess its decision to deduct 15% from low-income groups without TIN in cognizance of the regressive impact it has on them.