Malaysia: Tax incentives included in economic package to support businesses (COVID-19)

Malaysia: Tax incentives included in economic package

A plan unveiled 17 March 2021 is intended to offer tax and other incentives as support for businesses affected by the coronavirus (COVID-19) pandemic.

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In addition to waiving certain fees for a 12-month period and providing wage subsidies for a three-month period, the “PEMERKASA” package focuses on 20 strategic initiatives and includes the following tax incentives:

  • Regarding income tax—
    • Additional tax deduction for companies participating in Safe@Work initiative
    • Further tax deduction with regard to COVID-19 screening expenses incurred by employers
    • Extended tax incentives for tour operators
    • Deferment of tax instalment payments for tourism industry
    • Income tax relief on domestic travel
  • Regarding indirect tax—
    • Extended exemptions from service tax and tourism tax for hotels and other similar establishments
    • Exemption from entertainments tax (duty)
    • Excise-tax exemption for motorcycles assembled domestically

Read a March 2021 report [PDF 390 KB] prepared by the KPMG member firm in Malaysia 

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