PETALING JAYA: A tax expert has hailed the 2025 budget proposal of a 2% tax on share dividends as a “unique idea” to hit top income-earners without burdening 85% of taxpayers.
KPMG Malaysia’s head of tax Soh Lian Seng hailed the move to widen Malaysia’s tax revenue base through the imposition of a 2% tax on dividend income of over RM100,000 earned by individual shareholders.
It targets the top 15% of taxpayers without further burdening the other 85%, he said, Bernama reported.
However, Sim Kwang Gek of Deloitte Malaysia called for more clarification on the exemption for dividends from firms enjoying pioneer status and reinvestment allowance incentive.
Another tax consultant said the 2025 budget tabled yesterday offers businesses a much-needed respite by not implementing any new major taxes.
Steve Chia of PricewaterhouseCoopers Malaysia described the budget as forward-thinking, riding on the back of positive economic sentiments with its focus on progressive tax measures, reported Bernama.
However, he called for clarity on measures such as the expansion of sales and services tax, the introduction of a carbon tax and mandatory EPF contribution for non-citizen workers.
He also said that the global minimum tax is expected to level the playing field as far as tax incentives are concerned, ensuring that multinational companies pay the right amount of taxes, at 15%.
Chia stressed the importance for Malaysia to revamp its incentive regime to ensure it attracts high-growth, high-value investments that propel the country to become a high-income nation.
He also said that the proposed carbon tax on the steel, iron and energy industries addresses environmental concerns, collectively creating a more robust and equitable tax system and supporting long-term economic and environmental goals.
