The 2015 budget tabled on October 10 2014 carried the theme
People Economy, aimed at improving the well-being of its
citizens, and it outlined seven main strategies to achieve
that. This article will focus on the first strategy, which is
to strengthen economic growth, and in which the Government will
continue to provide a conducive and comprehensive ecosystem to
accelerate domestic and foreign investment.
Among the measures introduced is the strengthening of the
Islamic financial market. There will be an introduction of a
shariah-compliant investment product called the Investment
Account Platform (IAP), which will be implemented with a
start-up fund of RM150 million ($45 million). The IAP will
provide opportunities to investors in financing entrepreneurial
activities and developing viable small and medium enterprises.
The IAP will serve as a platform to attract institutional and
high net worth individuals to invest in the Islamic financial
markets. Individual investors will be given income tax
exemption on profits earned from qualifying investments for
three consecutive years.
To promote high quality and focused investments, there is a
proposal for a more specialised incentive package for
investment projects based on technology, innovation and
knowledge, involving highly-qualified and knowledgeable
employees with high salaries. No specific details on this
incentive and its effective date are known at this moment.
Another measure proffered is the incentive for the
establishment of principal hubs. There will be continued
efforts to further increase the number of multinational
companies' global operational centres in Malaysia.
With the imposition of the Goods and Service Tax from April
1 2015, the Government has taken steps to reduce the direct
taxes for individuals and corporations. In addition, corporates
will enjoy tax deduction incentives for secretarial fees and
tax filing fees.
In respect of Real Property Gains Tax (RPGT), a purchaser of
landed property is required to withhold and remit the entire
RPGT payable or two percent of the aggregate value, whichever
is lower. From January 1 2015, the retention sum withheld will
be increased to three percent. There will also be amendments
made to the RPGT Act 1976 in relation to the deemed market
value for disposal of assets of deceased persons and a disposal
by way of a gift.
Julian M Hashim