Author: Boss Boleh

Grants and start-up funding have been set down in Budget 2022 to help the country’s innovation and technology thrive. For research and development, RM423 million has been set aside under the Science, Technology, and Innovation Ministry (MOSTI) and the Ministry of Higher Education.

Real Property Gains Tax (RPGT) is a tax imposed by Malaysia’s Inland Revenue Board (IRB) on chargeable gains resulting from the sale of real estate. For Budget 2022, from the sixth year forward the RPGT would not be applied to property sales and this would mean that the RPGT rate for property disposals in the sixth and subsequent years.

Stamp duty exemption on loans and funding for Peer-to-Peer (P2P) Financing was included in the budget for 2022. Peer-to-peer loan or financing arrangements between SMEs and investors performed from 1 January 2022, to 31 December 2026, are exempt from all taxes.

In terms of indirect taxes, the budget for 2022 proposes a two-phased special voluntary disclosure program for indirect taxes. From 1st January 2022, real estate gains tax will be exempt. Mergers and acquisitions are free from stamp taxes.

Certain tax-related initiatives, such as the renewal of current tax benefits, were also included in the 2022 budget. A unique “reinvestment allowance” has been extended until 2024.

Cukai Makmur was imposed on the budget in 2022, as well as other Small and Medium Enterprises (SME). There will also be a reassessment of the handling of unabsorbed losses, as well as a double tax deduction for Anchor enterprises participating in the vendor development program.

Individual or personal income tax, in Budget 2022, the budget plan included the continuation of individual tax relief, as well as tax relief for contributions to social security organizations (SOCSO).

Budget 2022 shows that economic growth in 2021 is expected to recover from the economic downturn experienced in 2020 as a result of the COVID-19 pandemic.

Budget 2022 proposals to reconstruct the economy were created around the primary themes of recovery, resilience, and reform. Measures aimed at raising government tax revenues and sprurring investment are included in the tax plans.