Budget 2023 Announces Individual Tax Reduction By 2.0%

Close to one million resident individual taxpayers will enjoy reduced taxes as part of the government’s efforts to increase disposable incomes, said Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz.

Resident individual tax is reduced by two per cent for taxable incomes of between RM50,000 and RM100,000 per annum, he said when tabling the Budget 2023 in the Dewan Rakyat on Oct 7.

Tengku Zafrul said for taxable incomes between RM50,000 and RM70,000 per annum, the tax rate will be lowered from 13 per cent to 11 per cent, while for taxable income within the RM70,000 to RM100,000 range, the rate will be reduced from 21 per cent to 19 per cent.

Additionally, the tax rate for taxable incomes between RM250,000 and RM400,000 per annum, as well as between RM400,000 and RM600,000 per annum will be at 25 per cent.

Malaysia’s Corporate sector also saw important allocation being channelled to help boost the economy.

Income tax for Small and Medium Enterprises (SME) will be reduced from 17% to 15% for the first RM10,000 earned and set to benefit 150,000 tax payers from SME businesses.

Up to RM9bil through business financing guarantee companies to enable to SMEs to get financing.

RM10bil from Bank Negara Malaysia for SMEs for automation, digitalisation, tourism and agriculture.

RM11.4 billion for maintenance and repair of existing government buildings.

RM92 million for development of the halal industry.

Socso to provide RM1,000 mobility assistance for employees from Sabah and Sarawak with jobs in the peninsular and vice versa.
All self-employed workers must contribute to Socso.

RM150mil allocated for employment incentive, RM600-RM700 a month for three months for marginalised groups such as the disabled (OKU), ex-convicts, Orang Asli and women to rejoin the workforce.

Government will bear 80% of the Socso contribution. Food delivery personnel, farmers, fishermen, artistes under Finas and hawkers need to contribute only 20% of the total contribution. This will be further expanded to gig economy workers and taxi drivers.

Socso to provide RM1,000 mobility assistance for employees from Sabah and Sarawak with jobs in the peninsular and vice versa.

Government will make SOCSO’s SKSPS contributions mandatory for all self-employed sectors in stages.

Socso to provide incentives for employers to hire the disabled, Orang Asli, ex-convicts and women returning to work. The incentive worth to RM750 a month will be given for three months per employee.

GLCs and GLICs to invest up to RM50 billion in 2023.

The government plans to extend the stamp duty exemption by up to 100% on loan or financing restructuring or rescheduling agreements until 2024.

RM1bil to fund RM1,000 one-off grant for registered SMEs and registered taxi drivers, to benefit one million people.

RM100 million to support development of local technology companies.

RM510 million to improve road infrastructure to Pengerang.

Government will provide special incentives for investors in the chemical and petrol chemical industry.

Tax incentives and RM50 million to support development of aerospace components.

Tax incentives for local pharmaceutical companies has been extended.

RM20 million in matching grants to support development of local products.

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