KUALA LUMPUR, Oct 11 -- The government has no intention of bringing back the Good and Services Tax (GST), instead it will introduce a new Digital Services Tax and several tax incentives and exemptions to further boost the economy, said Finance Minister Lim Guan Eng.
He said the Digital Services Tax will be implemented on Jan 1 next year.
“This will include services such as, but not limited to, downloaded software, music, video or digital advertising.
“Foreign service providers can commence registration with the Royal Malaysian Customs Department as of Oct 1, 2019,” he said when tabling the 2020 Budget themed “Driving Growth and Equitable Outcomes Towards Shared Prosperity” in Parliament today.
Lim said to ensure a more progressive personal income tax structure, a new band for taxable income in excess of RM2 million would be introduced at the rate of 30 per cent, a hike of two percentage points from the current 28 per cent rate.
This increase will affect about 2,000 top income earners in the country, he said.
Meanwhile, Lim said new incentive framework, a comprehensive review and revamp of the existing framework, would be ready by Jan 1, 2021.
He said the government would provide up to RM1 billion customised packaged investment incentives annually over five years, as part of the strategic push to attract targeted Fortune 500 companies and and global unicorns in high technology, manufacturing, creative and new economic sectors.
The government would also make available RM1 billion in customised packaged investment incentives annually over five years to transform Malaysia’s businesses into most competitive enterprises in global export markets, he said.
Lim said the tax incentives given to venture capital and angel investors would be extended until 2023 to further encourage alternative sources of funding for start-up companies and to attract more foreign investment to Malaysia.
To further promote high-value added activities in the electrical and electronics (E&E) industry to transition into 5G digital economy and Industry 4.0, the government would provide tax exemption up to 10 years for E&E companies investing in selected knowledge-based services.
A special Investment Tax Allowance to encourage companies in E&E sector that have exhausted the Reinvestment Allowance to further reinvest in Malaysia would also be given.
To support the growth of small and medium enterprises (SMEs), Lim said the government has decided to increase the chargeable income tax to RM600,000 next year from the current RM500,000, with the rate maintained at 17 per cent.
This subjected to the SME having paid-up capital of not more than RM2.5 million and annual sales of not over RM50 million, he said.
On the GST, Lim said the government managed to repay the tax refunds amounting to RM15.9 billion to more than 78,000 companies as at end-September 2019 and income tax refunds totalled RM13.6 billion have been returned to 448,000 companies and 184,000 taxpayers.
To improve efficiency of management of taxpayer appeals, the government would merge the Special Commissioner of Income Tax and Customs Appeal Tribunal into the Tax Appeal Tribunal.
“Through this merger, taxpayers who are dissatisfied with the decision of the director-general of the Inland Revenue Board or the director-general of Customs Department may submit a tax-related appeal under all applicable tax laws to the Tax Appeal Tribunal to be operation in 2021,” he said.
He said beginning January 2021, Malaysians above 18 years old and corporate entities would be assigned a Tax identification Number.
-- BERNAMA
KUALA LUMPUR, Nov 12 -- The impact from Budget 2022 on the fixed income market is almost negligible, given that there were no major surprises in terms of the country’s debt financing requirement and fiscal position, said Manulife Investment Management (Manulife).
KUALA LUMPUR, Nov 11 -- Budget 2022 tax initiatives may not contribute significantly to government revenue and there is a need to look for other ways to increase it for the sustainable economic growth of the country, according to a tax expert.
KUALA LUMPUR, Dec 16 -- Budget 2021 was formulated based on reports presented by relevant bodies whose data could be determined to be valid, the Ministry of Finance (MoF) said.
MANCHESTER, Oct 16 -- Industry players say the 2020 Budget tabled last Friday clearly reflects the government's commitment to developing the domestic logistics sector by addressing o...
Exclusive report by Jailani Hasan
LABUAN, Oct 16 --The Labuan Chamber of Malay Entrepreneurs ( DUML) has hailed the 2020 Budget presented by Finance Minister Lim Gu...
Exclusive report by Mohd Fharkhan Abdul Ghapar
KUALA LUMPUR, Oct 15 (Bernama) -- The government is advised to refine the implementation of the 90-day maternity ...
KUALA LUMPUR, Nov 19 -- The Ministry of Transport which receives RM6.05 billion allocation under Budget 2021, will be providing various incentives to benefit the people.
KUALA LUMPUR, Nov 16 -- The Ministry of Agriculture and Food Industries (MAFI) and the private sector must escalate co-operation to optimise the allocation in the 2021 Budget to MAFI so that ...
KUALA LUMPUR, Nov 9 -- The inclusive Budget 2021 touching on the involvement of various parties contributing to the economic chain related to the tourism sector is seen capable of revital...
© 2025 BERNAMA. All Rights Reserved.
Disclaimer | Privacy Policy | Security Policy This material may not be published, broadcast,
rewritten or redistributed in any form except with the prior written permission of BERNAMA.
Best viewed in Firefox 58.0.1 (64-bit) & Chrome Version 63.0.3239.132 (Official Build) (64-bit) with 1920 x 1080 resolution