KUALA LUMPUR, Feb 25 — The use of a tiered approach to the country’s tax incentive would reward higher-quality investments, while the announcement to redefine the parameters of the type of investments Malaysia needs is important given the intense competition for new investments in the region.
PwC Malaysia tax leader Jagdev Singh said investments are a key driver for growth, hence, moving away from focusing on capital investment alone and placing emphasis on the quality and multiplier effects in terms of creating high-quality jobs and building key ecosystems to help the development of local players is important.
“The proposals to introduce the Luxury Goods Tax effective this year, the commitment to study the introduction of Capital Gains Tax on disposal of non-listed shares from 2024 onwards, and the increase of personal tax rate to two per cent from the 0.5 per cent for the tax brackets between RM100,001 to RM1 million, should not come as a surprise,” he said in a statement.
Jagdev said that since the government had stated it would not introduce broad-based consumption tax in Budget 2023, the options available to it to increase tax revenues are limited.
“Nevertheless, the study on the potential introduction of Capital Gains Tax should be done on a measured basis to ensure that the benefits (namely the amount of tax revenue generated) far outweighs the costs (impact to the investment ecosystem and the administrative burden to tax authorities and taxpayers),” he added. — Bernama
