TSLA
Tesla
-- 417.410 NVDA
NVIDIA
-- 137.490 MSTR
MicroStrategy
-- 302.960 BA
Boeing
-- 176.550 RGTI
Rigetti Computing
-- 17.0000 Malaysia's 2025 fiscal budget! Don't say it's none of your business!
What topics are worth paying attention to in the budget proposal?
KPMG Malaysia believes that the Finance Minister, Datuk Seri Anwar, presenting the 2025 budget proposal, demonstrates a serious determination to expand the tax base, ease national debt, and reform the economy.
KPMG Malaysia's tax director, Soo Liansang, commented that those earning dividends of 0.1 million ringgit or more will have to pay a 2% dividend tax next year, which is a unique idea by the Chang Ming government, clearly targeting the wealthiest 15% cohort in the country.
KPMG Malaysia's tax director, Soo Liansang, commented that those earning dividends of 0.1 million ringgit or more will have to pay a 2% dividend tax next year, which is a unique idea by the Chang Ming government, clearly targeting the wealthiest 15% cohort in the country.
It is called unique because this tax system cleverly avoids more than 85% of the domestic population, ensuring that vulnerable groups are exempt from the burden of the new tax system.
However, Su Liansheng also believes that the budget outlines more details on the carbon tax, will introduce a sugary beverage tax, and phase in reforms to the Sales and Service Tax (SST), all expected to bring positive benefits to the country's economic development.
It is called unique because this tax system cleverly avoids more than 85% of the domestic population, ensuring that vulnerable groups are exempt from the burden of the new tax system.
However, Su Liansheng also believes that the budget outlines more details on the carbon tax, will introduce a sugary beverage tax, and phase in reforms to the Sales and Service Tax (SST), all expected to bring positive benefits to the country's economic development.
However, he hopes that clear regulatory guidelines will be issued after the above tax system proposals are put forward, and transition plans will be carefully arranged to ensure the effective implementation of the tax system.
Su Liansheng is also pleased to hear that small and medium-sized enterprises will receive tax incentives and financial support.
In addition, he commended measures such as relatively complex 'Smart Logistics' tax incentives, the Johor Forest City family office initiative, and tax exemptions for electric vehicles.
Su Liansheng is also pleased to hear that small and medium-sized enterprises will receive tax incentives and financial support.
In addition, he commended measures such as relatively complex 'Smart Logistics' tax incentives, the Johor Forest City family office initiative, and tax exemptions for electric vehicles.
Although a new investment incentive framework will be introduced in the third quarter of 2025, KPMG still believes that after the implementation of the Global Minimum Tax (GMT), it is necessary to observe whether our country will lose competitiveness in the international market.
In the view of KPMG, tax exemptions have been expanded, taking into account the disabled and elderly, and raising the minimum wage to 1700 ringgit. This budget is clearly people-oriented.
With the consideration of the well-being of the people, the government's series of tax incentives aim to narrow the income gap among the citizens, thereby easing the impact of rising living costs.
In the view of KPMG, tax exemptions have been expanded, taking into account the disabled and elderly, and raising the minimum wage to 1700 ringgit. This budget is clearly people-oriented.
With the consideration of the well-being of the people, the government's series of tax incentives aim to narrow the income gap among the citizens, thereby easing the impact of rising living costs.
How is the 2% dividend tax calculated?
Prime Minister and Finance Minister Datuk Seri Anwar stated that the scope of this new dividend tax system would cover individuals receiving dividends from listed companies and dividends received through shareholdings by agents.
Subsequently, Anwar further outlined the threshold for dividend tax, where dividend income exceeding 0.1 million ringgit will be subject to relevant taxes.
It consists of four components in its formula, namely:
A - Statutory dividend income
It consists of four components in its formula, namely:
A - Statutory dividend income
B - Total income
C - Taxable income
D - Taxable dividend income
C - Taxable income
D - Taxable dividend income
Dividend tax calculation formula:
A/B x C = D
7 exemption scenarios
At the same time, this tax rate also has 7 exemption scenarios:
1. Overseas dividends;
2. Enterprise dividends that enjoy Pioneer Status and reinvestment subsidy;
3. Dividends distributed by tax-free transportation companies;
4. Dividends distributed by cooperatives;
5. Dividends issued by closed-end funds;
6. Dividends received by residents from Inland Revenue Board;
7. Any exemption granted to shareholders dividends.
At the same time, this dividend tax also does not apply to four institutions, namely Employees Provident Fund (EPF), Armed Forces Fund Board (LTAT), National Savings Fund (ASNB), and any trust units.
Looking back at the existing system, before the 2008 evaluation, the income tax on company dividend distributions was based on the complete exemption system. Under this system, dividend taxation was levied at both the company and shareholder levels, but the tax payable by the shareholders would be adjusted based on the tax already paid through tax credits.
Starting from 2008, dividends distributed by companies are subject to single-tier income tax. Under this single-tier tax system, the tax on company profits is the final tax, and the dividends distributed to shareholders are exempt from tax at the shareholder level.
A/B x C = D
7 exemption scenarios
At the same time, this tax rate also has 7 exemption scenarios:
1. Overseas dividends;
2. Enterprise dividends that enjoy Pioneer Status and reinvestment subsidy;
3. Dividends distributed by tax-free transportation companies;
4. Dividends distributed by cooperatives;
5. Dividends issued by closed-end funds;
6. Dividends received by residents from Inland Revenue Board;
7. Any exemption granted to shareholders dividends.
At the same time, this dividend tax also does not apply to four institutions, namely Employees Provident Fund (EPF), Armed Forces Fund Board (LTAT), National Savings Fund (ASNB), and any trust units.
Looking back at the existing system, before the 2008 evaluation, the income tax on company dividend distributions was based on the complete exemption system. Under this system, dividend taxation was levied at both the company and shareholder levels, but the tax payable by the shareholders would be adjusted based on the tax already paid through tax credits.
Starting from 2008, dividends distributed by companies are subject to single-tier income tax. Under this single-tier tax system, the tax on company profits is the final tax, and the dividends distributed to shareholders are exempt from tax at the shareholder level.
The budget is not friendly to the stock market.
Fong Leong Investment Bank's Retail Research Director Wu Junsheng said in an interview with Nanyang Siang Pau that this is a budget that cares for the people, with no real surprises overall, mainly laying the foundation for our country's economy, which does not have a significant impact on the stock market.
iFAST Research Analyst Xu Kaisheng believes that this budget is not very friendly to the market. Mainly because the highly anticipated large-scale infrastructure projects were not mentioned, coupled with the adjustment of the minimum wage and the bearish impact of the new dividend tax.
"Major projects like the anticipated MRT 3 line, Jurong sbs transit, and the new high-speed rail were not addressed, which is expected to bring some selling pressure on construction stocks."
iFAST Research Analyst Xu Kaisheng believes that this budget is not very friendly to the market. Mainly because the highly anticipated large-scale infrastructure projects were not mentioned, coupled with the adjustment of the minimum wage and the bearish impact of the new dividend tax.
"Major projects like the anticipated MRT 3 line, Jurong sbs transit, and the new high-speed rail were not addressed, which is expected to bring some selling pressure on construction stocks."
On the other hand, Prime Minister and Finance Minister Datuk Seri Anwar announced in the 2025 Budget today that starting from February 1 next year, the minimum wage will be increased from 1500 ringgit to 1700 ringgit. In addition, non-local citizen employees will be required to contribute to the provident fund.
This is expected to impact companies in labor-intensive industries such as gloves, plantations, construction, etc. Overtime fees will also be based on the new minimum wage, which will increase costs.
Xu Kaisheng pointed out that investors are particularly alarmed by the new dividend tax introduced in this budget.
This is expected to impact companies in labor-intensive industries such as gloves, plantations, construction, etc. Overtime fees will also be based on the new minimum wage, which will increase costs.
Xu Kaisheng pointed out that investors are particularly alarmed by the new dividend tax introduced in this budget.
To broaden the tax base, the government will impose a 2% dividend tax on individual dividend income exceeding 0.1 million ringgit starting next year.
"This may prompt investors to consider investment banks, property trusts and other high-dividend stocks, not to the extent of short selling, just a lack of catalyst."
He believes that this may cause some fluctuations in Bursa Malaysia and Malaysian stocks.
Possible special dividends
Regarding dividend tax, Wu Junsheng also has some opinions, because based on the collection threshold, this is mainly aimed at taxing the wealthy or fund managers.
He believes that this may prompt some net cash companies to distribute special dividends before next year's implementation.
"In general, company management or decision-makers hold a larger stake, and it is not ruled out that they may take profits in advance."
He added that as the government considers exempting dividend tax for the Employees Provident Fund, National Investment Agency (PNB) and other large institutions, the expected impact on blue chip stocks will not be significant.
Focus on two major investment themes
Investors can focus on two major themes, namely stocks related to the development of Johor and Sarawak.
"In this budget, there are further explanations on the Johor-Singapore Special Economic Zone (JSSEZ), while Sarawak is taken into account for political reasons and local infrastructure projects."
Additionally, investors can pay attention not only to developments related to Johor, but also to areas related to green energy and the National Energy Transition Roadmap (NETR), such as utilities.
"At the same time, considering the government's active promotion of Malaysia Year 2026 for tourism, some sectors like aviation, hotels or trusts, consumer goods, tobacco and alcohol, etc., also have bullish prospects."
"This may prompt investors to consider investment banks, property trusts and other high-dividend stocks, not to the extent of short selling, just a lack of catalyst."
He believes that this may cause some fluctuations in Bursa Malaysia and Malaysian stocks.
Possible special dividends
Regarding dividend tax, Wu Junsheng also has some opinions, because based on the collection threshold, this is mainly aimed at taxing the wealthy or fund managers.
He believes that this may prompt some net cash companies to distribute special dividends before next year's implementation.
"In general, company management or decision-makers hold a larger stake, and it is not ruled out that they may take profits in advance."
He added that as the government considers exempting dividend tax for the Employees Provident Fund, National Investment Agency (PNB) and other large institutions, the expected impact on blue chip stocks will not be significant.
Focus on two major investment themes
Investors can focus on two major themes, namely stocks related to the development of Johor and Sarawak.
"In this budget, there are further explanations on the Johor-Singapore Special Economic Zone (JSSEZ), while Sarawak is taken into account for political reasons and local infrastructure projects."
Additionally, investors can pay attention not only to developments related to Johor, but also to areas related to green energy and the National Energy Transition Roadmap (NETR), such as utilities.
"At the same time, considering the government's active promotion of Malaysia Year 2026 for tourism, some sectors like aviation, hotels or trusts, consumer goods, tobacco and alcohol, etc., also have bullish prospects."
Furthermore, there will be a live online review of the 2025 budget on Saturday (19th), so please stay tuned.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
Mr Lim : even glove industry is considered a sector. so funny