Timeline of presentation and theme
The budget of the financial year 2019-2020 of this rapidly growing economy was presented on October 11, 2019, by the finance minister of Malaysia Mr YB Tuan Lim Guan Eng. This budget has an underlying theme, “Driving Growth and Equitable Outcomes Towards Shared Prosperity
Detail of taxes and reliefs included
They suggested an increase of 2-30% in the income tax for the persons having per annum income above 2, 00, 000 RM, and for the non-residents, they increase tax percentage by 2%, and it becomes 30% from 28%. To lighten the burden from the married couples who are looking for fertility treatment, they uplift the income tax on the expanses of medical treatment so that the cost of fertility treatment can be covered easily.
Individual tax relief to be expanded from 1000RM to 2000RM. Because pilgrimage to holy places and Umrah is performed solely for a religious purpose, they suggested that personal income tax rebate, which is equal to the amount of levy paid to be given, can only be claimed two times in a lifetime. To claim that deduction is possible with the proof of boarding pass and the subject, which may be an Umrah visa or any other letter of confirmation for the pilgrimage to a holy place. A committee organizes this all for the Promotion of Inter-Religious Understanding and Harmony Among Adherents comes under the umbrella of the Department of National Unity and Integration, Prime Minister’s Department.
Key Points of Corporate tax
Income limit, which will be eligible to tax rate 17%, is increased to 600,000RM from 500,000 Rm while the companies having per year sales, not above 50RM million, comes under this tax ratio. For the claiming of capital allowance by non-SME and SME, they increase the value of each asset to 2000 RM from 1300 RM. Qualifying capital allowance limit to eligible for the claim by non-SME is also increased to 20,000 RM from 13,000 RM for the assessment of each year.
Real property gain tax
Real properties that are acquired before 2000 will be amended to the same market value, which is on January 1, 2013, as the price of acquisition for real property’s disposal acquired before 2013 for the computation of RPGT.
Transfer of instrument of a first residential home, which has priced up to 500,000 RM, there will be no stamp duty for the following transactions.
- Residential home transfer from a housing developer to a financial institution
- Residential home transfer to a buyer from a financial institution
- Property transfer from parents to children and vice versa in the way of affection and love in Malaysian citizens is free from 50% stamp duty.
- On foreign currency loan agreements, stamp duty will be increased to 2000 RM from 500RM.
For the sake of encouragement to stage performers to visit Malaysia more and more this year they proposed that admission tickets for the stage performers like dances, theatres, concerts, singing, and music for both local and international artists are fully exempted from entertainment duty in the Federal Territory of Kuala Lumpur areas like Putrajaya and Labuan will be approved for this with the consent of local authorities.
In this budget, they also suggested that the purchase and import of goods like packaging material, components, and raw material are fully exempted from sales tax. The portion of trading or manufactured products which are not exported or sold in the local market will not be exempted from sales tax. Refuse, or a waste of raw material, packaging material, and components that are used for the manufacturing of exempted goods which are sold or disposed of in the local market are also not exempted from sales tax.
Malaysia budget 2020 has given complete exemption from the service tax on the coaching and training services provided to disabled persons with visual, physical, speech, mental, hearing and learning problems, but this will apply to the service providers who are registered with Department of social welfare or Ministry of Health Malaysia or for such centers of coaching and training of disabled persons endorsed by any national association for disabled persons registered with Registrar of Societies of Malaysia. Such organizations that are not owned by any government organization are not exempted from this tax.