Fiscal plan attracts investments in right areas, says tax expert

08 Oct 2022

Budget 2023 does not shy away from using incentives to attract foreign direct investment in strategic areas, says PwC Malaysia tax leader Jagdev Singh.

“I am glad to see Budget 2023 announcing the extension of the National Economic Regeneration Plan (Penjana) relocation incentive to attract electrical and electronics investments via the extension of existing tax incentives and a reduced personal tax rate for C-suite expatriates until 2024.

“I also see continued efforts in the right direction with the implementation of a global minimum tax. However, tax breaks alone may no longer be a large differentiating sector,” he said in a statement in response to Budget 2023 which was tabled by Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz in Parliament last Friday.

Nonetheless, Jagdev said Malaysia needs to distinguish itself by offering world-class infrastructure and human capital at a competitive price.

“The announcement of the National Investment Aspirations just the night before recognises the importance of developing the ecosystem, which can bring in the right investments,” he said.

Meanwhile, on the sustainable development efforts announced in Budget 2023, KPMG Malaysia head of tax Soh Lian Seng said although no specific date on the implementation of carbon tax was announced in the budget, the government is evaluating the carbon pricing mechanism.

“Already introduced in various developed countries, the carbon tax will serve as a new source of government revenue and is certainly a step in the right direction to assist our nation in achieving carbon-neutrality by 2050,” he said in a separate statement.

He added that the extension of the Green Investment Tax Allowance and Green Income Tax Exemption by another two years to Dec 31, 2025 will also continue to incentivise and encourage businesses to accelerate the use of green technology and embark on green projects.

Source: Bernama