On 13 October 2023, the government announced an RM393.8 billion expansionary Budget for 2024. The national Budget comprises RM303.8 billion in operating expenditure and RM90 billion in development expenditure. The following are some of the key measures as proposed in
the Budget:
(1) Tax Deduction on Environmental, Social and Governance (ESG) Related
Expenditures
Effective from YA 2024 to YA 2027, it is proposed that a tax deduction up to RM50,000 per Year of Assessment is given for expenses incurred to comply with ESG standards. (i.e.: Transfer Pricing Documentation, E-Invoicing Implementation and any reporting requirement related to ESG)
(2) Review of Capital Allowance on Information and Communication Technology (ICT) Equipment and Computer Software
Effective from YA 2024, capital allowance for ICT equipment and computer software will be revised to initial allowance (IA) at 40% and annual allowance (AA) at 20%. As such, CA claimed will hasten from 4 years to 3 years.
(3) Extension of Tax Deduction on
Issuance of SRI Sukuk
Tax deduction on the cost of issuing SRI-linked Sukuk that is approved or authorised or lodged with the Securities Commission Malaysia to be extended for another period of 4 years. (from YA 2024 until YA 2027)
(4) Extension of Tax Incentive for Rental of Electric Vehicles (EV)
Rental of non-commercial electric vehicle (EV) is eligible for tax deduction up to RM300,000 is extended for another 2 years of assessment until YA 2027.
(5) Tax Deduction on Contributions for Environmental Preservation and Conservation Projects
A tax deduction is eligible for entities contributing or sponsoring activities related to tree planting projects or environmental preservation and conservation awareness projects verified by the Forest Research
Institute Malaysia. Eligible for applications received by the Ministry of Finance from 1 January 2024 to 31 December 2026.
(6) Industrial Building Allowance (IBA) for Private Nursing Home for the Elderly
Annual allowance on industrial building allowance for Senior Citizens Private Nursing Care Home
approved by Ministry of Health Malaysia will be revised to 10%. For expenses incurred from 1 January 2024 to 31 December 2026 on cost of buildings built or purchased, including renovation costs.
In summary, the tax measures outlined in the Budget 2024 show the government’s efforts to strengthen the national economy and stimulate the growth of the business sector. However, the abovementioned
measures serve as an overview and do not encompass all the measures unveiled in Budget 2024.
