Malaysia expands the tax incentives for companies to set up hubs

Malaysia said that it plans to expand tax incentives for the firms who use the country as its base to operate their business whether they are local or international. The tax incentives are going to be effective this year. The Malaysian Investment Development Authority said that firms which are eligible for the Principal Hub policy by the government would enjoy a tax rate of 10% instead of 24%. A MIDA official also said that previously the companies that were eligible could only opt for a 10% tax rate on the money they made the year prior to joining the programme. 

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MIDA says the move will attract investors

The firms which still have to establish their presence in the country could apply for the tax rates of 0 per cent and 5 per cent. It is based on the investments and employment creation by these companies. The tax rates for these firms earlier were about 0 per cent, 5 per cent and 10 per cent. MIDA has set the deadline as December 31, 2020, for companies to apply for the expanded incentive. The MIDA said in a statement that such an enhancement of the PH tax incentive has come at the right time in order to make up its policies and plans. This is going to help them attract investors so that Malaysia is strongly integrated into the region and another market. It also said that it aims to make the country competitive with its neighbours as the optimal headquarters hub in the Asia Pacific with this review. 

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Malaysian PM thanks former Deputy FM for free advice

In another incident, the Malaysian PM Dr Mahathir Mohamad reportedly thanked Ahmad Maslan (former deputy finance minister) for his 'free advice' on the tax system. He also said that the Sales and Services Tax also known as the SST would not be removed. He also said that the government does not have any intention to have a tax system that the public doesn't approve off. The PM then said that SST with time will replace the Goods and Services Tax in revenue ranking. Dr Mohamad spoke about the SST at the lower house of the Parliament of Malaysia which is called the Dewan Rakyat. 

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(With inputs from agencies)