A leading Malaysian trade body has praised the Budget 2023’s emphasis “on strengthening business resilience especially among micro, small and medium enterprises (MSMEs)”.
The Malaysian Institute of Accountants (MIA) also said that the aims developing and attracting female talent, and speeding up digital transformation were “aligned with the Institute’s purpose of nation building”.
MIA President Bazlan Osman said: “Malaysia GDP is expected to grow 6.5%– 7% in 2022 and 4% – 5% in 2023. MIA believes that it is critical to build the resilience and agility of SMEs to take advantage of the growth opportunities.”
He added that Budget 2023 offers three key initiatives that will support the resilience and business continuity of MSMEs, which are:
- RM1,000 one-off grant to benefit one million registered MSMEs.
- RM10 billion fund from Bank Negara Malaysia for SMEs for automation, digitalisation, tourism and agriculture.
- Reduction in income tax for MSMEs from 17% to 15% for the first RM100,000 earned.
“The budget initiatives for the MSMEs will further stimulate their growth and create opportunities for our profession such as providing assurance and advisory services,” said Datuk Bazlan.
MIA especially welcomes the expanded incentives enabling women’s participation in the workplace, which can help tackle the country’s worker shortage, according to MIA CEO Dr. Wan Ahmad Rudirman Wan Razak. “Currently, women accountants make up over 54% of MIA membership. This Budget provides several attractive incentives for attracting and retaining women talent, including professional women accountants,” he said.
These initiatives include:
- The waiver of tax from 2023 to 2028 for women returning to work after a career break, which will incentivise qualified female accountants to re-enter the workforce.
- Employment incentives for employers that hire women talent returning to work.
- Allocation for a special training programme which will facilitate the increase in the number of women directors in Malaysia, enhancing diversity, equity and inclusion (DEI).
“This will help to address the talent shortage amongst professional accountants in public practice and in business,” said Wan Ahmad Rudirman.
In addition, MIA encourages companies and member firms to customise their workplace flexibility to better suit the needs of female professionals with family commitments and facilitate policies to encourage female employees to return to the workforce, he said.
MIA has also commended the Budget’s digital initiatives. These include:
- Digitalisation of invoices, with which LHDNM will implement e-invoice in phases starting from 2023 under a pioneer project with the selected taxpayers.
- The establishment of the Digital Innovation Fund (DIGID) which will further facilitate automation and digitalisation of businesses in Malaysia.
- The RM10 billion borrowing fund for SMEs to support automation and digitalisation of the small and medium practitioners (SMPs). This will help address funding challenges identified as one of the top three barriers of technology adoption by MIA in its three consecutive surveys on technology adoption by the accounting profession in Malaysia.
- Efforts in combating cyberthreats. Cybersecurity is one of the top five technology trends affecting the accounting profession, as indicated in the three MIA surveys on technology adoption by the accounting profession in Malaysia.
MIA also applauded efforts to align Malaysia’s tax regime to reflect international developments and to enhance tax governance and administration. Key tax proposals announced in Budget 2023 include:
- The introduction of a minimum effective tax rate under BEPS Action Plan – Pillar 2, whereby the Government proposes to implement a Qualified Domestic Minimum Top-up Tax after further study with a targeted introduction in year 2024.
- Efforts to improve tax governance administration via the introduction of the Tax Identification Number (TIN). With effect from 2023, citizens and permanent residents who attain the age of 18 years old will automatically be given a TIN which is compulsory for stamping of all documents and instruments.
- The proposed introduction of a reinvestment allowance for approved hotel and tourism projects under the Income Tax Act 1967.
- Tax rate for resident individuals to be reduced by 2% for the following chargeable income range: RM50,001 – RM70,000 from 13% to 11%; and RM70,001 – RM100,000 from 21% to 19%.