By Admin | November 01, 2021

The Budget 2022 has been announced on 29th October 2021 by Finance Minister.

Key Highlights

  • Existing foreign source income tax exemption removed from 1st January 2022
  • Marginal 33% income tax bracket for companies on chargeable income of more than RM 100m for Year of Assessment (YA) 2022 only
  • Reinvestment allowance (RA) extension for 2 more years on expired qualifying capital expenditure RA period
  • RPGT revert to 0% for individuals and non-company for disposal on sixth year onwards
  • Companies carry forward losses for 10 YAs instead of 7
  • Sales tax exemption on CKD (100%) and CBU (50%) passenger cars extended until 30th June 2022

Corporate Tax

  • All businesses permitted to revise income tax estimate on 11th month of basis period until 31st October 2022
  • Extension of tax relief on cost of renovation up to RM 300,000 until 31st December 2022
  • Scope of double deduction for companies sponsoring scholarships for students expanded to all fields of study, extended to YA 2025

Small and Medium Enterprises (SMEs)

  • Six months deferment of income tax instalment payments for micro enterprises and SMEs until 30th June 2022
  • Extension of stamp duty exemption in relating to merger and acquisition of micro enterprises and SMEs for applications revived between 1st July 2021 to 30th June 2022

Individual Tax

  • Scope of tax relief for EPF contribution expanded to include voluntary contributions
  • SOCSO contribution increase limit to RM 350 from RM 250 including EIS contribution
  • Tax relief for purchase of computer and mobile device of RM 2,500 extended to YA 2022
  • New individual tax relief of up to RM 2,500 for purchase, install, lease and subscribe for Electronic Vehicle (EV) charging facilities from YA 2022 and 2023

Indirect Tax

  • Service tax on brokerage activities for listed shares exempted from 1st January 2022
  • Excise duty imposed on premixed drinks with sugar content and liquid or gels containing nicotine for use of e-cigarette and vape
  • Full import duty, excise duty and sales tax exemption on EV sales extended to 30th June 2022
  • Service tax imposed on charges for delivery of goods
  • Entertainment duty exemption on all entertainment activities extended until 31st December 2022
  • Tourist tax exemption extended to 31st December 2022

Stamp Duty

  • Stamp duty on contract notes increased from 0.1% to 0.15% from 1st January 2022. Existing RM 200 cap will be removed
  • Stamp duty exemption for restructuring or rescheduling business loan or financing agreement extended until 31st December 2022

Other Proposals

  • Tax Identification Number (TIN) for all companies and individuals above 18 years old from year 2022
  • Introduction of Tax Compliance Certificate as pre-condition for government procurement from 1st January 2023
  • Palm oil windfall profit levy for Sabah and Sarawak increased to 3% from 1.5%
  • One off payment to B40 households, elderly, single parents with children and single individuals scheduled under Bantuan Keluarga Malaysia (BKM)
  • Rental deduction for property owners who reduce rental by minimum 30% extended to 30th June 2022
  • EPF contribution reduction from 11% to 9% extended until 30th June 2022

Please do not hesitate to contact us should you have any enquiries.

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