The Malaysian Institute of Accountants (MIA) hailed the following measures of the retabled Budget 2023 that are expected to positively impact the accountancy profession and its services to the economy.
These are the:
MIA welcomed the announcement of the Tun Razak Exchange (TRX) in Kuala Lumpur and Iskandar Malaysia in Johor as financial hubs/zones to attract high-quality foreign investments, which are expected to benefit the accountancy profession.
“To position Malaysia as a financial hub, the accountancy sector plays an important role in terms of providing access to professional accountancy services,” stated MIA President Datuk Bazlan Osman.
“On one hand, the accountancy sector will benefit from exciting growth opportunities for its services as Malaysia strengthens its position as a financial hub. On the other hand, the competitiveness and international position of the Malaysian economy will be enhanced by a vibrant and flourishing accountancy sector.”
“Budget 2023 introduced tax measures that are aimed at diversifying sources of tax revenue through the imposition of wealth taxes and capital gains taxes, while being business-friendly to small and medium sized entities (SMEs),” said Datuk Bazlan.
As a leading advocate for tax governance as well as improved tax policies and administration, MIA has engaged with the Tax Authorities and PEMUDAH in various meetings to discuss the proposed policy changes and other tax proposals from stakeholders for Budget 2023.
The following tax measures as announced in Budget 2023 may be relevant to MIA members:
- Capital gains tax for disposal of unlisted shares by companies will be introduced from 2024.
- Preferential tax rate for SMEs will be reduced to 15% on the 1st chargeable income of RM150,000.
- Individual tax rate will be reduced by 2% for the chargeable income of RM35,001 to RM100,000 from YA 2023. For high income earners, there will be an increase in tax rate of 0.5% to 2% for chargeable income of RM100,001 to RM1 million.
- Luxury goods of prescribed value will be subject to tax with effect from 2023.
- The C-suite of companies in electrical & electronics and aerospace industries which were affected by the pandemic, and that relocate their operations to Malaysia will be subject to 15% tax until 2024.
- Tax deduction for cost of listing on the ACE Market and the LEAP Market of BURSA Malaysia will be extended to YA 2025.
- Charitable hospitals registered as Company Limited by Guarantee will be given an income tax exemption equivalent to the expenses incurred for the charitable purpose. Donors of the charitable hospitals will be given a tax deduction of up to 10%.
- Voluntary Disclosure Programme will be re-introduced for waiver of 100% penalty effective from 1 June 2023 to 31 December 2024.
Budget 2023 emphasised measures to strengthen the global leadership of Malaysia in Islamic Finance, especially in the emerging areas of wealth redistribution to address growing inequality and sustainability. MIA hailed the promotion of financial inclusion through green financing, guided by BNM’s Climate Risk Management and Scenario Analysis, Towards A Greener Financial System and Financial Inclusion Framework 2023-2026 and the emphasis from regulators to increase equity-based Islamic Financing with risk sharing concept.
For its part, MIA has:
MIA welcomed Budget 2023’s provision of funding for digital transformation, which aligns with its Digital Technology Blueprint – to identify the availability of funding to assist MIA members in the adoption of digital technology.
“Additionally, MIA found that funding is the top three barriers of technology adoption in its three consecutive surveys on technology adoption by the accounting profession in Malaysia especially for the SMEs including the small and medium sized practices (SMPs). The grants available will support the digital transformation of these entities,” stated MIA CEO Dr. Wan Ahmad Rudirman Wan Razak.
Based on MIA Technology Adoption by the Accountancy Profession Survey 2022, MIA also found that lack of talent to utilise technology effectively and understanding the benefits of adopting technology being the top barriers to technology adoption. Hence, the Government’s effort in strengthening the Pusat Ekonomi Digital (PEDi) to assist and educate SMEs on technologies is commendable, added Dr. Wan Ahmad.
MIA also welcomed the Government’s effort in combating cyberthreats, as cybersecurity is one of the top five technology trends affecting the accounting profession for three consecutive years as indicated in the said MIA survey.
Other salient measures are Budget 2023’s allocation of RM725 million to provide coverage under Jalinan Digital Negara (JENDELA), continuous effort on 5G network implementation via Digital Nasional Berhad (DNB), and free internet for 56 chosen Program Perumahan Rakyat (PPR). This will address the infrastructure challenge including lack of network connectivity in Higher Learning Institutions (HLIs) as recommended in the Report on a Study of Emerging Technology Adoption within the Accounting Programmes by the Higher Learning Institutions (HLIs) in Malaysia issued by MIA in 2021.
Finally, MIA commends the Government’s effort on driving digital transformation for various sectors as well as Government services and offering funding on digital content to promote local businesses.
As a leading advocate for the adoption and integration of the environment, social and governance (ESG) agenda by businesses, MIA commends Budget 2023’s generous allocations for enabling sustainable transformation, said Dr Wan Ahmad Rudirman. The salient measures to note in the Budget include:
- BNM to provide a RM2 billion fund to support start-up companies in green technology and encourage SMEs to adopt low carbon practice.
- Khazanah to provide RM150 million to encourage environmental-friendly projects, including supporting the carbon market and reforestation.
- Improved implementation of Skim Pembiayaan Teknologi Hijau (GTFS) where the guaranteed value is increased to RM3 bilion until 2025.
- A proposal to extend the Green Investment Tax Allowance (GITA) dan Green Income Tax Exemption (GITE) until 31 December 2025 by enhancing the period of encouragement from 3 to 5 years for eligible green activities.
- RM30 million allocation to support more activities in relation to Sustainable Development Goals (SDG).