Malaysia: Indirect and income tax proposals in “re-tabled” 2023 budget

The Minister of Finance “re-tabled” the 2023 budget.

The Minister of Finance “re-tabled” the 2023 budget.

The Minister of Finance on 24 February 2023 “re-tabled” the 2023 budget, which includes various indirect and income tax proposals. The budget was originally tabled in October 2022. Read TaxNewsFlash

One proposal would introduce a new tax in 2023 on luxury goods. It was also proposed that the voluntary disclosure and amnesty programme for indirect tax that ended on 30 September 2022 be re-introduced for the period 1 June 2023 to 31 May 2024.

In addition, there are a number of proposals in relation to duties and sales tax exemptions for electric vehicles, nicotine gum and nicotine patches, among others, as well as studio and filming production equipment.

Read a February 2023 report [PDF 1.3 MB] prepared by the KPMG member firm in Malaysia that examines the budget from an indirect tax perspective.

Corporate income tax measures concern:

  • Reduction of income tax rate for micro, small, and medium enterprises
  • Tax deduction for sustainable and responsible investment-linked Sukuk
  • Tax deduction on listing cost
  • Income tax exemption for charitable hospitals
  • Special tax deduction for expenditure on Malaysian handicraft

Individual income and stamp duty tax measures concern:

  • Capital gains tax
  • Changes to income tax rates for resident individuals
  • Stamp duty (tax) exemption for purchase of first residential home
  • Stamp duty on transfer of property between parents and children

The budget also includes environmental, social, and corporate governance (ESG) and other tax incentives.

Read a February 2023 report prepared by the KPMG member firm in Malaysia that provides a budget overview.


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