14 October 2023
Key measures impacting employers and individuals
Summary
The expansionary 2024 Malaysia Budget tabled by Prime Minister Dato’ Seri Anwar Ibrahim on Friday, 13 October 2023, is the country’s largest-ever budget, as he made a further push to strengthen the resilience of the economy and the people through sustainable and targeted policy reforms. The range of measures announced include expanding the revenue base, various tax reliefs and incentives, which are intended to encourage inclusive growth and equitable distribution.
A number of measures addressed Malaysia’s need to remain attractive and a competitive destination for investments that bring not only financial resources but also expertise, networks and connections that can stimulate the economy – specifically those that are of interest for employers and would impact the workforce, talent, foreign investors and individuals are:
Overall, it is encouraging that the Budget 2024 exhibits proactive steps in amassing our country’s talent pool towards adaptability to the growth needs of the economy. These include, attracting back foreign talents, infusing wealth from investors, upskilling and facilitating learning and development, particularly in digitalisation, and finally enhancing the social security protection of the working population.
1. Individual taxpayers
Updated Personal Tax Reliefs and Other Deductions
| Reliefs/ Deductions | Proposed change | Effective |
| Expanded | ||
| Sports equipment and activities (personal tax relief) | This relief of up to MYR1,000 covers the following:
and is expanded to include:
| From Y/A 2024 |
| Expanded | ||
| Medical expenses for self, spouse or child (personal tax relief) | Now includes dental examination and treatment expenses from dental practitioners registered with the Malaysian Dental Council up to MYR1,000 | From Y/A 2024 |
| Expenses for parents’ medical, special needs and carer expenses (personal tax relief) | Now includes full medical examination for parents up to MYR1,000 | From Y/A 2024 |
| Lifestyle (personal tax relief) | Now includes fees for skills enhancement courses (such as language, photography, sewing, etc), but excludes purchase of sports equipment and gymnasium membership fees. | From Y/A 2024 |
| Donations to approved institutions / organizations / funds (other deductions) | Now expanded to educational programs including sports education.
Deduction of up to 10% of the aggregate income of an individual is allowed. | Not specified |
| Extended | ||
| Upskilling and self enhancement course fees (personal tax relief) | Extended for another three years | Ys/A 2024 to 2026 |
| Expenses relating to electric vehicle (EV) charging facilities (incl. installation, rental, hire purchase) (personal tax relief) | Extended for another four years | Ys/A 2024 to 2027 |
Other Individual Tax Incentives
| New! | Proposed change | Effective |
| Film production companies, foreign film actors, and film crew filming in Malaysia | Special tax rates between 0% to 10% | Not specified |
| Expanded / Extended | ||
| Equity crowdfunding investments (50% exemption at aggregate income level) | Includes investments made by individual investor through Limited Liability Partnership nominee company | Investments made from 1 January 2024 until 31 December 2026 |
| Angel investments to tech start-up companies (100% exemption at aggregate income level) | Extended | Investments made from 1 January 2024 until 31 December 2026 |
2. Employees
Tax Incentives and Exemptions
| New! | Proposed change | Effective |
| Non-citizen individuals holding key/C-suite positions appointed by an approved Global Services Hub company |
| Applications received by the Malaysian Investment Development Authority from 14 October 2023 until 31 December 2027. |
| Increase | ||
| Childcare Allowance | Increase in exemption for child care allowances received by employees or paid directly by employers to child care centres (up to MYR3,000) | From Y/A 2024 |
| Extended | ||
| Career Comeback (For women returning to work) – 12 months tax exemption | Applications extended for another 4 years. | Applications received by Talent Corporation Malaysia Berhad from 1 January 2024 until 31 December 2027 |
| Returning Expert Programme (“REP”) flat tax rate of 15% on employment income for 5 consecutive years | Applications extended for another 4 years. |
3. Employers
Employment tax measures impacting employers’ obligations
4. Other general tax measures
5. Other general tax measures
Increase in the i-Saraan contributions matched by the government for gig workers/ self-employed up to MYR500/year or MYR5,000 lifetime amount (previously MYR300/year). This will result in the build up of the gig workers/ self-employed retirement savings and increase the annual dividend pay-outs received from EPF.
6. Immigration & workforce development
Introduction of the Malaysia Visa Liberalisation Plan
Relaxation of the Malaysia My Second Home (MM2H) conditions
How we can help
While we await the draft Finance Bill 2024 to see what other amendments the Budget may bring, please join us for our Mobility Roundup webinar at 12.00pm on Tuesday, 31 October 2023 (register here) as we discuss the Budget announcement measures that impact employers and employees in Malaysia.
Contact us
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
Further information on Vialto Partners can be found here: www.vialtopartners.com