As Malaysia approaches 2024, ICAEW chartered accountants, including those from KPMG, Grant Thornton, and BDO, share insights on the promising financial landscape.
Key projections include strategic Foreign Direct Investments (FDIs) with a shift towards outcome-based incentives, the introduction of capital gains tax (CGT) aiming to balance fiscal sustainability and market stability, and a commitment to Environmental, Social, and Governance (ESG) principles.
The government’s plan to address the subsidy issue before considering the reintroduction of GST is emphasized. Overall, a focus on fiscal reform, subsidy rationalization, and ESG principles aims to foster economic growth responsibly.
ICAEW Projections
“Traditional tax incentives have been successful in attracting FDIs, especially in high-tech and export-oriented industries. However, re-evaluating these incentives in for the future interconnected global economy becomes essential, prompting a shift towards outcome-based incentives. This shift aligns incentives with measurable impacts, moving beyond mere fiscal appeasement.” says Kevin Foo, a Partner at KPMG PLT, and the former Chairman of the ICAEW Members’ Society Malaysian Chapter.
According to ICAEW chartered accountants at BDO, David Lai, Head of Tax Advisory and Tan Chin Teck, Executive Director, Tax, “For local business, especially SMEs, one of the most exciting changes in 2024 is the government’s commitment to promote ESG principles in Malaysia. This commitment is reflected in its proposal for annual income tax deductions of up to RM50,000 for ESG-related expenditures, such as e-invoicing, compliance reporting with ESG standards and corporate governance framework reporting.”
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