Malaysia´s Budget 2024

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The Malaysian Government tabled the 2024 Budget (“the Budget”) in Parliament on 13 October 2023, themed “Economic Reforms, Empowering the People”. 
    
The Budget aims to strengthen the country’s economy, to elevate the wellbeing of Malaysians and to increase government tax revenues, as well as to encourage new investments and reinvestments into Malaysia. It also aims to build the other Unity Government initiatives such as the National Energy Transition Roadmap, the New Industrial Master Plan 2030 and the Reviewed 12th Malaysia Plan. 
    

To achieve this, the Budget focuses on three (3) key areas as follows:    

  1. Good governance for service agility;
  2. Restructuring of the economy to boost growth and;
  3. Raising people’s standard of living. 
   
With RM393.8 billion, the Budget 2024 is the highest-ever budget allocation in history, of which RM 303.8 billion are allocated for operating expenditure, and RM90 billion for development expenditure.
   

Key tax measures 

  • To broaden the tax base, the service tax rate will be increased from 6 % to 8 % for all taxable services (except services in the telecommunications, foods and beverages sector); and the scope of service tax will be expanded to include logistics, brokerage, underwriting and karaoke services; 
  • Capital Gains Tax (“CGT”) will be imposed at a rate of 10 % on net gains from the disposal of unlisted shares as of 1 March 2024;
  • A tax on luxury goods will be introduced at rates ranging from 5 % to 10 % on specific high-value goods such as jewellery and watches, based on certain thresholds. The specific implementation date for this tax has yet to be announced;
  • The implementation of mandatory E-Invoicing for taxpayers with an annual turnover or revenue of more than RM100million will be deferred from 1 June 2024 to 1 August 2024. Taxpayers in the other income categories will be required to comply in phases, starting as of 1 July 2025; 
  • The implementation of the Global Minimum Tax (“GMT”) in 2025 for multinational enterprises (MNEs) with global income of at least EUR750 million.

 From The Newsletter

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Priya Selvanathan

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