PETALING JAYA, Feb 24 (Bernama) --  Malaysia’s Budget 2023 allocation, which has been revised upward to RM388.1 billion, was tabled by the Prime Minister and Finance Minister YAB Datuk Seri Anwar Ibrahim at 4.00pm today. According to Mr. Soh Lian Seng, Head of Tax at KPMG in Malaysia, the proposals were anchored clearly along the Malaysia Madani policy framework that aims to strengthen Malaysia’s fiscal and economic position. Key initiatives that are of particular interest include:
 
SVDP 2.0
Following the success of the Special Voluntary Disclosure Program (SVDP 1.0) introduced by the Pakatan Harapan government in 2018, this unity government has taken a smart move to reintroduce SVDP 2.0 as a means of collecting additional tax revenue.
 
A total of 286,482 taxpayers participated in the SVDP 1.0, bringing in an additional RM7.877 billion of taxes to the government’s coffers that time. With SVDP 2.0 providing a full penalty waiver to voluntary participants (compared to a 10-15% penalty in SVDP 1.0), the take-up rate should far exceed that of SVDP 1.0., and we can expect SVDP 2.0 to collect more than RM10 billion. This potential is conditional to the full mechanism yet to be revealed, for example: will participants of SVDP 2.0 reap the same benefits whereby LHDN will not carry out audit and investigation on their companies for the years involved? Will SVDP 2.0 be akin to an amnesty? We will have to wait and see.
 
Luxury goods tax
The act of taxing luxury goods (such as watches, fashion products) is a clear approach to tax high net-worth individuals. This practice is in line with other countries; for example, Singapore imposed this tax on luxury cars, while China imposed 60% import tariff on luxury goods.
 
Capital gains tax
There is a strong signal of an impending implementation of capital gains tax from 2024, which is now under study by the government in line with international best practices. Generally, gains on capital assets are not subject to tax, except for gains arising from the disposal of real property situated in Malaysia which is subject to real property gains tax up to 30%. In Asia, only Malaysia, Singapore and Hong Kong have yet to impose capital gains tax – for the main reason that most of the income are derived from trading.
 
This will have wide implications, pending details of the mechanism that will be in place; if imposed, this will be a significant revenue stream for the government.
 
For more insights, visit www.kpmg.com.my/budget2023

SOURCE : KPMG in Malaysia

FOR MORE INFORMATION, PLEASE CONTACT:
Name : Berenice Then
Executive Director, Markets
KPMG in Malaysia
Tel : 016-6604692
Email : berenicethen@kpmg.com.my 

Name : Aminfarhan Sazuki
Officer, Marketing & Communications
KPMG in Malaysia
Tel : 010-5947507
Email : aminfarhansazuki@kpmg.com.my 

--BERNAMA