Tax Relief and Exemption for Businesses in 2022

Malaysia has always been known for providing a variety of tax incentives to different types of businesses.

 

Similarly, in its 2022 budget, Malaysia has announced many incentives to support companies and boost their post-pandemic growth. The overall worth of the 2022 budget is around 333.2 billion ringgits.

 

According to official sources, the budget’s goal is to build resilience in the economic sector and promote economic recovery to ensure companies can get back to their optimum working conditions after the pandemic.

 

Malaysia’s finance minister has also announced that the government is expecting the economy to grow between 5.5% to 6.5% in 2022.

 

Following are the major tax incentives in Malaysia as part of the 2022 budget.

1. Extension in SST Exemption

The vehicles sales tax exemption or SST was scheduled to end on 31st December 2021. However, according to the new measures, it has been extended to 30th June 2022.

 

100% exemption is given to the locally assembled vehicles, while fully imported vehicles will get 50% exemption. Furthermore, the local electric vehicle industry is also getting a 100% exemption to promote the development of electric vehicles.

 

KWSP

2. EPF Contribution

The finance minister has announced that the Employee Provident Fund will increase the period to minimize the EPF contribution rate from 11% to 9% till June 2022.

 

This measure aims to increase the amount of money given to the people.

RM2 billion has been allocated for this highly popular initiative.

3. Real Property Gains Tax

According to the 2022 Budget, real property gain tax will not be imposed on property disposals by citizens, foreigners, or permanent residents from the sixth year onwards.

 

As a result, the RPGT rate for property disposal in the 6th year is significantly reduced from 5% and 10% to 0% from 1st January 2022.   

 

The purpose of this measure is to support the real estate industry and give it much-needed support after the COVID-19 pandemic.

 

It is highly expected that the new tax incentives in Malaysia will play an integral role in the economic recovery and help overall economic conditions to improve for the people.

4. Income Tax Reliefs

The new budget also provides the following incentives to people in the next few years.

  • Significant extension of the special individual income tax relief of up to RM 2,500 on buying mobiles, laptops, and tablets till 31st December 2022.
  • The scope of individual income tax relief for health screening expenditure is increased to cover the expenses of mental health consulting services.
  • Individuals can also claim an extension in the individual income tax relief of up to RM3,000 for the payment of kindergarten charges until 2023.
  • Special individual income tax relief for local tourism expenses up to RM1,000 has also been extended till 2022.
  • People who purchase and install electric vehicle charging facilities can claim income tax relief of up to RM2,500.

5. PTPTN Payments

The government is offering a discount on the PTPTN payments from 1st November 2021 to 31st April 2022 for the following conditions:

  • 15% off for those individuals who want to make a full settlement.
  • 12% off for those who want to settle at least 50% of the loan balance.
  • 10% off for the individuals who are making repayment via scheduled salary deduction.
ptptn

According to the latest guidelines, borrowers can apply online to make the payment via salary deduction.

The discounts provided by the government will be reflected in the borrower’s loan account at the end of each month. These statements can be reviewed from the 7th of the next month.

6. Tax Incentives for SMEs

The Malaysian government has announced several tax incentives for businesses and SMEs. Companies should consider getting in touch with a professional accounting firm in Malaysia to get familiar with these incentives and apply for them.

 

For instance, the government is offering a total of RM40 billion under the Semarak Niaga program through direct loans, regular financing, and equity injections. Similarly, there are many micro-credit schemes offered by authorities like Bank Negara Malaysia and Bank Rakyat.

All In All

These initiatives show that you can apply for many different types of tax incentives in Malaysia.

 

It is highly expected that the government will start offering even more incentives in the future to support businesses and boost the overall economic recovery.

 

It is always a good idea for businesses to rely on professional accounting firms in Malaysia to get help from professionals in applying for relevant tax incentives and successfully obtain them.