Tax experts: Budget 2025 to see expanded tax scope, new taxes unlikely

Soh Lian Seng, Head of Tax at KPMG in Malaysia, shared his perspective on Budget 2025, on which the government will focus on expanding the tax base through a more progressive system aimed at reducing leakages and improving compliance. Building on the initiatives introduced in Budget 2024, he highlighted that to bolster national growth, Budget 2025 may revisit incentives such as the extension of capital allowances for automation or increasing deductions for environmental, social and govemance (ESG)-related expenses for small and medium enterprises (SMEs). Soh also emphasized that Malaysia proactively review its windfall profit levy on palm oil and global minimum tax, particularly by considering the initiatives of neighboring countries to gain a competitive edge in attracting both foreign and local investments.

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