As the new Shared Prosperity Vision 2030 sets the backdrop of the national budget, Regina Lau, Executive Director of KPMG Tax Services Sdn Bhd commented on how both businesses and public will stand to gain from tax measures introduced in Budget 2020.
“Under the Vision to reduce the wealth disparity across all groups regardless of ethnicities, the role of small and medium enterprises (SMEs) is paramount. While tax cuts were high on everyone’s wish list but were not much anticipated, the 17 per cent tax rate on the first RM600,000 of SMEs’ chargeable income from RM500,000 previously was certainly much welcome. The outright RM17,000 tax saving for all SMEs is not insignificant and hopefully, the SMEs will channel the savings into digitalization and automation of their businesses for which various grants available to the SMEs have been announced by the Finance Minister,” she added.
While there is a reduction in tax for SMEs, Lau noted that individual high income earners will have to foot out more with effect from the year of assessment 2020. A new income band will be introduced where income exceeding RM2 million will be subject to tax at 30 per cent. She also noted that one area of disappointment to many was that there is no change to Real Property Gains Tax (RPGT) on disposals after the fifth year.
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