LIM: EXTRA RM100M EXPECTED

New rate for taxable income above RM2m is lower than World Bank’s proposed 35pc

MALAYSIA expects to have an additional income of RM100 million from the new tax band for those with taxable income in excess of RM2 million.

Finance Minister Lim Guan Eng said while the government had raised the tax rate by two percentage points to 30 per cent, the World Bank had proposed 35 per cent instead.

“We are still among the lowest if compared to other countries in the region.

“We decided to raise it to only 30 per cent because we don’t believe in harsh and abrupt measures,” said Lim at the Budget 2020 Forum, here, yesterday.

He said the government viewed the new rate as being within taxpayers’ means, adding that this was to ensure a more progressive income tax structure.

During the tabling of the 2020 Budget on Friday, Lim said the government expected to collect RM244.5 billion revenue next year, an increase of RM11.2 billion from this year, excluding the one-off special dividend of RM30 billion from national oil firm Petroliam Nasional Bhd.

In 2017, Malaysia’s tax revenue relative to the gross domestic product was only 13.1 per cent, while countries such as Vietnam, South Korea, Poland and Chile collected 19, 15.4, 16.8 and 17.4 per cent, respectively.

For small and medium enterprises, the tax rate for chargeable income of up to the first RM500,000 was reduced by one per cent to 17 per cent. The forum was jointly organised by Malayan Banking Bhd, CGS-CIMB Securities Sdn Bhd and RHB Banking Group.