This year, Malaysia's Budget is fittingly named "Ekonomi Madani: Memperkasa Rakyat".
As Malaysia navigates through the challenges of high inflation, slower global growth, and geo-political tensions, it's crucial for the government to keep a careful financial approach while supporting Malaysians and businesses.
Here are some notable highlights. For Individuals and Families
The Government is assisting Malaysians in managing the rise in daily costs attributed to elevated inflation and the economic impact of global events. In 2024, Malaysians can avail themselves of the following measures:
Tax relief for self-improvement of up to RM2,000 will be given to promote upskilling and exploration of new fields, extended till 2026.
Lifestyle relief will extend to cover the fees for personal development courses such as language, photography, sewing and etc.
Tax relief for electric vehicle (EV) charging facility expenses of up to RM2,500 will be given for a period of 4 years.
Tax deduction will be given for EV rental cost for 2 years.
The government is proposing a special tax relief for purchases of sports equipment and sports activities, limited to RM1,000. The tax relief will also apply to fees spent on sports training.
Starting 2024, the Memorandum of Transfer (MOT) between beneficiaries of a will, faraid, or the Distribution Act 1958 will be charged a stamp duty fee of only RM10.
Corporate There is no change in the tax rates for 2024.
E-Invoicing is mandatory for businesses that have reached the income threshold of more than RM100 million with effective from 1 August 2024. Other income brackets are required to implement e-Invoicing in phases and full implementation shall be done by 1 July 2025.
Global Minimum Tax shall be implemented in 2025 for companies with global revenue of more than RM3.74 billion (€750 million).
SOCSO contribution for monthly wage ceiling to increase from RM5,000 to RM6,000.
Tax deduction for companies that support tree-planting activities or awareness projects related to environmental conservation and preservation under the governance of the Forestry Research Institute of Malaysia (FRIM).
Capital Allowance on ICT devices and computer software to be reduced to 3 years from YA2024 onwards.
Tax System Changes
Since COVID-19 has tapped into our reserves, Malaysia needs to increase revenue for upcoming costs. But it's not as straightforward as just "taxing the rich." So, Malaysia is aiming for a fair, progressive tax system where everyone shares responsibility and those who can afford more, contribute more.
Luxury Goods Tax will be implemented in the range of 5% to 10% based on the value of luxury goods. This is exempted for foreign tourists.
Capital Gain Tax on Unlisted Shares will be taxed at 10% effective from 1 March 2024.
Service Tax increment from 6% to 8% will be applied to all sectors, except Food & Beverage sector and telecommunication sector.
Stamp duty of 4% is imposed on transfer of real estate ownership by non-citizen individuals and foreign-owned companies (excluding Malaysia permanent residents), with the objective of regulating real estate prices.
Grants and Subsidies
These grants and subsidies are designed to ensure that Malaysia maintains its competitiveness in attracting and retaining investments.
Investment Tax Allowances of 70% to 100% to be provided to encourage investments in high-growth and high-value areas (HGHV).
Digitalisation grants of RM5,000 allocated to 20,000 MSMEs to fund the upgrading of digital accounting systems.
Automation and Digitalisation loan facilities of up to RM900 million funded by Bank Negara Malaysia (BNM).
Via BNM, Bank Simpanan Nasional (BSN) and National Entrepreneurial Group Economic Fund (Tekun), financial facilities amounting to RM2.4 billion to be made available to MSMEs.
Govt-linked investment companies (GLICs) will allocate funds of up to RM1.5 billion to incentivize startups, including MSMEs to explore into high-growth and high-value areas (HGHV).
Tax Incentives for women returning to work extended till 2027, aimed to increase women’s labour force participation to 60%.
Environment & Climate Change
Safeguarding our Climate Resilience Accelerate low-carbon transition for our economy and society, to achieve net zero emissions by 2050. Take steps to adapt to global warming and rising sea levels.
Tax rebate of up to RM2,400 for the purchase of electric bikes to buyers with annual income below RM120,000 under its Electric Motorcycle Use Promotion Scheme.
Putrajaya to serve as Malaysia’s low-carbon city, with government buildings slated to incorporate solar panels and adopt electric vehicles (EVs) as their official vehicles. In collaboration with TNB, Gentari and Tesla, an investment of over RM170 million will be made to establish EV charging stations.
Net Energy Metering (NEM) encourages the usage of solar panels by extending the incentives till 31 December 2024.