How is Malaysia broadening its tax base currently?

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Malaysia is Broadening its Tax Base Through Targeted Measures on Higher Earners

The Malaysian government is currently broadening its tax base by implementing targeted measures aimed at individuals and entities with greater financial capacity, rather than introducing a broad wealth tax. This approach focuses on increasing revenue from specific income streams and asset disposals that are considered to be within the purview of those with higher financial means. The Ministry of Finance has indicated that these measures are designed to ensure tax policies remain progressive and contribute to reducing socioeconomic inequality.
Implementation of Capital Gains Tax on Unlisted Shares

A key element of the current tax base expansion involves the introduction of a capital gains tax specifically on the disposal of unlisted shares. This measure targets profits generated from the sale of shares in companies that are not publicly traded on a stock exchange. By imposing this tax, the government aims to capture revenue from capital appreciation in this particular segment of the investment market.
Introduction of Dividend Tax on Significant Income

The government is also implementing a dividend tax that applies to dividend income exceeding RM100,000. This means that individuals receiving substantial amounts of dividend income will be subject to taxation on the portion that surpasses this threshold. This policy is designed to ensure that those who benefit from significant dividend payouts contribute more to government revenue.
Taxation of Profit Distributions in Limited Liability Partnerships

Furthermore, the tax base is being broadened to include profit distributions exceeding RM100,000 received by partners in a limited liability partnership (LLP). This measure specifically targets partners in LLPs who receive substantial profit distributions, ensuring that these higher earnings are subject to taxation. The focus is on the quantum of profit distribution rather than a general tax on all LLP partners.

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How is Malaysia broadening its tax base currently?

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