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Malaysia: Malaysian Budget 2023 – Tax Highlights

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In brief

On 24 February 2023, the Prime Minister and Minister of Finance, YAB Dato’ Seri Anwar Ibrahim re-tabled the Malaysian Budget 2023 (“Budget“) themed “Building Malaysia Madani“. The MADANI Budget is focused on addressing the current economic challenges, inspiring confidence with institutional and governance reforms and facilitating social justice by reducing inequality.

In administering taxes, the Government intends to adopt a more progressive tax structure to ensure fair distribution of revenue to prioritize the low and middle-income groups. Amongst others, these measures include a proposed increase to the personal income tax rates of higher income groups, imposition of luxury goods tax, voluntary disclosure programs and capital gains tax for the disposal of unlisted shares.

We discuss these tax measures further in this client alert. 

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This client alert was issued by Wong & Partners, a member firm of Baker McKenzie International, a global law firm with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a “partner” means a person who is a partner or equivalent in such a law firm. Similarly, reference to an “office” means an office of any such law firm. This may qualify as “Attorney Advertising” requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome.

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Author

Adeline Wong heads the Tax, Trade and Wealth Management Practice Group of Wong & Partners and the Tax and Trade Practice Group of Baker McKenzie member firms in the Joint Asian Offices. She has over 30 years of experience in the area of corporate tax planning, advisory, audit and investigation work. Adeline won the Euromoney Asia Women in Business Law Awards for the Tax category in 2013, 2018 and 2020. Her practice was named the Tax and Trusts Law Firm of the Year by the Asian Legal Business Malaysia Law Awards in both 2020 and 2021. She is ranked as a Band 1 practitioner by Chambers Asia Pacific for Tax and by the Chambers High Net Worth Guide for Private Wealth Law. Clients commend her as "a leading tax lawyer" and a "standout name in the private wealth market in Malaysia" in the Chambers guides. She is also listed as a Leading Individual by Legal 500 Asia Pacific and as an Elite Practitioner by Asialaw Profiles for Tax. The International Tax Review also ranks Adeline as a Highly Regarded practitioner among its Tax Controversy, Indirect Tax and Women in Tax Leaders Guides. She has presented in both domestic and international tax conferences, including conferences organised by the Tax Executive Institute in the US, Society of Trust and Estate Practitioners in Singapore and Bloomberg BNA's Global Transfer Pricing Conference in Shanghai. She is also a regular contributor to established publications on tax-related legislation and developments in Malaysia, such as Bloomberg BNA and the International Bureau of Fiscal Documentation.

Author

Yvonne Beh is a partner in the Tax, Trade and Wealth Management Practice Group of Wong & Partners. She has been advising on Malaysian tax laws and legal issues relating to corporate and commercial matters in Malaysia for over 15 years. Chambers Asia Pacific ranked her as a Band 3 practitioner for Tax in 2021, having previously listed her as Up and Coming in 2020. In the Chambers guide, clients commend her for having "a deep knowledge base" and is "responsive and available." Yvonne is further recognized as a Highly Regarded practitioner by the International Tax Review's Women in Tax Leaders guide and Indirect Tax Leaders guide. Yvonne won the Euromoney Asia Women in Business Law Awards for the Tax category in 2015 and 2017. She was also recognised in the Asian Legal Business’ 40 under 40 list of leaders in 2016. She is a frequent speaker at both domestic and international tax conferences and regularly contributes to the Bloomberg BNA’s Asia Pacific Focus Tax Planning newsletter, the VAT Navigator, as well as the Asia Pacific Tax Bulletin published by the International Bureau of Fiscal Documentation.

Author

Jeff Sum is an Associate in Baker McKenzie, Kuala Lumpur office.

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