Malaysia’s government has announced a MYR 15 billion (around $3.7 billion) package of measures — including tax breaks — to help the economy deal with a resurgence of COVID-19 cases.
In a January 18 speech, Prime Minister Muhyiddin Yassin said the government has implemented four stimulus packages since the start of the pandemic, injecting MYR 55 billion into the economy. In June 2020 it announced a MYR 35 billion program that included long-term tax exemptions for foreign investors.
The government previously announced a special tax deduction for any company that reduces rental rates for leases with small- and medium-size enterprises by at least 30 percent between April 1, 2020, and March 31. “Based on current economic conditions, this special deduction will be expanded to cover the rental reduction also given to non-SMEs,” Yassin said. “This special deduction period will also be extended until 30 June 2021.”
Yassin said the 1 percent levy that employers are required to pay into the Human Resources Development Fund will be waived if the companies are unable to operate because of mandatory government lockdowns. Also, the MYR 1,000 of tax relief for health-screening payments has been expanded to cover COVID-19 screening, he said. Taxpayers making contributions to curb the spread of COVID-19 will be eligible for tax deductions based on their gross business income or aggregate incomes, he added.
The prime minister said because there has been greater reliance on the use of digital equipment, the government has decided to extend by one year special tax relief of up to MYR 2,500 for the purchase of mobile phones, computers, and tablets. The original incentive expired December 31, 2020.
Yassin also said a sales tax exemption for purchases of locally assembled and imported passenger vehicles that expired at the end of 2020 will be extended until June 30.
It’s not clear whether the measures must be approved by Parliament.