PETALING JAYA, Oct 7 (Bernama) -- The 2023 Budget, amounting to RM372.3 billion, was tabled by YB Senator Tengku Datuk Seri Utama Zafrul Tengku Abdul Aziz at 4 pm today, 7 October 2022. 

The proposal addressed critical areas and sectors and has taken into account the rising cost of living of Malaysians, particularly the M40 and the worst affected economic sectors such as tourism and travel. Most significantly, a 2% reduction in personal income tax rate for individuals with taxable income ranging from RM50,000 to RM100,000; the reinvestment allowance and income tax exemption for the hotel and tourism industries – these reliefs are well received.
 
It is good that emphasis continues to be placed on strengthening the recovery momentum for SMEs with the provision of a 2% tax cut for the first RM100,000 income, various tax allowances, financing assistance and grants for automation and digitalization spending.

Sustainability was certainly a key focus in the Budget 2023 proposals, with the Government’s intention to introduce Carbon Tax to drive the Environment, Social and Governance (ESG) agenda. Although no specific implementation date has been announced, the Government is evaluating the carbon pricing mechanism. Already introduced in various developed countries, the Carbon Tax will serve as a new source of government revenue and is certainly a step in the right direction to assist our nation in achieving carbon neutrality by 2050. The extension of the Green Investment Tax Allowance (GITA) and Green Income Tax Exemption (GITE) by another two years to 31 December 2025 will also continue to incentivize and encourage businesses to accelerate the use of ESG-focused technology and embark on green projects.

As eagerly awaited, the Government also announced that the implementation of the Qualified Domestic Minimum Top-Up Tax of 15% will commence in 2024, in line with international tax developments surrounding the Base Erosion Profit Shifting (BEPS) Pillar 2 initiatives. This will combat revenue leakages and profit-shifting activities and allow Malaysia the first right to charge top-up taxes on revenue from entities located in Malaysia that are paying low taxes.
 
For more insights, visit www.kpmg.com.my/budget2023
 
By Soh Lian Seng, Head of Tax at KPMG in Malaysia

Source: KPMG PLT

FOR MORE INFORMATION, PLEASE CONTACT:
Name: Kimberly Sammy
Manager, Marketing & Communications
KPMG in Malaysia
Tel: +603 7721 3924 / +6012 312 5373
Email: kimberlysammy@kpmg.com.my

Name: Aminfarhan Sazuki
Officer, Marketing & Communications
KPMG in Malaysia
Tel: +603 7721 7583 / +010 5947506
Email: aminfarhansazuki@kpmg.com.my 

--BERNAMA