Govt Has No Plans To Lower Corporate Income Tax -- MoF

KUALA LUMPUR, March 4 (Bernama) -- The government does not intend to lower the corporate income tax rate to attract more foreign investment to Malaysia, said the Ministry of Finance (MoF).

However, the ministry stated that the government remains committed to improving tax services and administration to enhance efficiency and service quality for taxpayers.

"The government must also ensure that future studies or reviews of income tax rates do not jeopardise the country's fiscal position, while maintaining a more equitable and progressive taxation system," the ministry said in a written response on the Senate website today.

The MoF stated this in response to a question from Senator Robert Lau Hui Yew on whether the government plans to reduce the corporate tax rate to attract foreign investment.

The ministry also noted that the government had previously reduced the corporate income tax rate from 25 per cent to 24 per cent, starting from the 2016 assessment year.

Additionally, the government has lowered the income tax rate for micro, small, and medium enterprises to enhance their competitiveness and support economic growth.

The effective tax rate borne by companies is lower than the standard rate,  MoF said depending on various factors such as tax incentives, deductions, exemptions, reliefs, and capital allowances available to each company.

"This ensures that Malaysia's corporate income tax rate remains competitive compared to other countries in the region, while tax incentives for various sectors continue to support overall economic growth," the ministry added.

-- BERNAMA