FOR IMMEDIATE RELEASE
7 OCTOBER 2022
BUDGET 2023 TO DRIVE BUSINESS RESILIENCE, DIGITAL TRANSFORMATION AND EXPAND ACCESS TO TALENT, SAYS MALAYSIAN INSTITUTE OF ACCOUNTANTS
The Malaysian Institute of Accountants (MIA) welcomes the Budget 2023’s emphasis on strengthening business resilience especially among micro, small and medium enterprises (MSMEs), developing and attracting women talent, and spurring digital transformation which are all aligned with the Institute’s purpose of nation building.
“Malaysia GDP is expected to grow 6.5%– 7% in 2022 and 4% – 5% in 2023. MIA believes that it is critical to build the resilience and agility of SMEs to take advantage of the growth opportunities,” said MIA President Datuk Bazlan Osman.
According to Datuk Bazlan, Budget 2023 offers three key initiatives that will support the resilience and business continuity of MSMEs, which are:
- RM1,000 one-off grant to benefit 1 million registered MSMEs.
- RM10 billion fund from Bank Negara Malaysia for SMEs for automation, digitalisation, tourism and agriculture.
- Reduction in income tax for MSMEs from 17% to 15% for the first RM100,000 earned.
“The budget initiatives for the MSMEs will further stimulate their growth and create opportunities for our profession such as providing assurance and advisory services,” said Datuk Bazlan.
MIA especially welcomes the expanded incentives enabling women’s participation in the workplace which can help address the country’s talent crunch. “Currently, women accountants make up over 54% of MIA membership,” said MIA CEO Dr. Wan Ahmad Rudirman Wan Razak. “This Budget provides several attractive incentives for attracting and retaining women talent, including professional women accountants.”
These key women-oriented initiatives include:
- The waiver of tax from 2023 to 2028 for women returning to work after a career break, which will incentivise qualified female accountants to re-enter the workforce.
- Employment incentives for employers that hire women talent returning to work.
- Allocation for a special training programme which will facilitate the increase in the number of women directors in Malaysia, enhancing diversity, equity and inclusion (DEI).
“This will help to address the talent shortage amongst professional accountants in public practice and in business,” said Dr. Wan Ahmad Rudirman.
In addition, MIA encourages companies and member firms to customise their workplace flexibility to better suit the needs of female professionals with family commitments and facilitate policies to encourage female employees to return to the workforce.
In line with the MIA’s emphasis on digital transformation of the accountancy profession to support the evolving digital economy, MIA commends the Budget’s digital initiatives. These include:
- Digitalisation of invoices, with which LHDNM will implement e-invoice in phases starting from 2023 under a pioneer project with the selected taxpayers.
- The establishment of the Digital Innovation Fund (DIGID) which will further facilitate automation and digitalisation of businesses in Malaysia.
- A provision of RM8 billion on 100% internet coverage under Jalinan Digital Negara (JENDELA) Fasa 2, suburban internet by TNB, 5G network implementation by Digital Nasional Berhad (DNB), allocation on improvement of digital networks in higher learning institutions and continuation of affordable prepaid data plan packages, all of which will help to address digital infrastructure challenges.
- The RM10 billion borrowing fund for SMEs to support automation and digitalisation of the small and medium practitioners (SMPs). This will help address funding challenges identified as one of the top three barriers of technology adoption by MIA in its three consecutive surveys on technology adoption by the accounting profession in Malaysia.
- Efforts in combating cyberthreats. Cybersecurity is one of the top five technology trends affecting the accounting profession, as indicated in the three MIA surveys on technology adoption by the accounting profession in Malaysia.
Enhancing Tax Governance and Regulation
MIA also compliments efforts to align Malaysia’s tax regime with international developments and to enhance tax governance and administration. Key tax proposals announced in Budget 2023 include:
- The introduction of a minimum effective tax rate under BEPS Action Plan – Pillar 2, whereby the Government proposes to implement a Qualified Domestic Minimum Top-up Tax after further study with a targeted introduction in year 2024.
- Efforts to improve tax governance administration via the introduction of the Tax Identification Number (TIN). With effect from 2023, citizens and permanent residents who attain the age of 18 years old will automatically be given a TIN which is compulsory for stamping of all documents and instruments.
- The proposed introduction of a reinvestment allowance for approved hotel and tourism projects under the Income Tax Act 1967.
- The scope of tax relief for life insurance premiums/ takaful life of RM3,000 to be expanded to include voluntary contributions to EPF.
- Tax rate for resident individuals to be reduced by 2% for the following chargeable income range:
- RM50,001 – RM70,000 from 13% to 11%; and
- RM70,001 – RM100,000 from 21% to 19%
- Chargeable income range for RM250,001 to RM400,000 to be combined with the range of RM400,001 to RM600,000 and be taxed at 25%.
As the developer of the accountancy profession, MIA also commends the large allocations for education and talent development. Key initiatives announced in Budget 2023 include:
- The higher allocation of RM 15.1 billion for the Ministry of Higher Education, which provides opportunities for learning institutions to increase their operating expenditure in areas such as training academicians and improving infrastructure of the universities.
- The allocation of scholarship and education loans amounting to RM 3.8 billion, which provides more opportunities and support for students to take up courses, including
- The allocation of RM 6.6 billion for education facilities catering for Bumiputera students from MARA, Yayasan Peneraju and UiTM, which will encourage more Bumiputera students to take up professional courses including accounting.
- The allocation of Technical and Vocational Education and Training (TVET) amounting to RM 6.7 billion, which also provides an opportunity for accounting students, especially accounting graduates at the diploma and certificate level, to acquire additional skills and knowledge.
NOTE TO EDITOR:
About the Malaysian Institute of Accountants (MIA)
Established under the Accountants Act 1967, MIA is the national accountancy body that regulate, develops, supports and enhances the integrity, status and interests of the profession in Malaysia. MIA accords the Chartered Accountant Malaysia or “C.A. (M)” designation. Working closely alongside businesses, MIA connects its membership to a wide range of information resources, events, professional development and networking opportunities. Presently, there are more than 37,500 members making their strides in businesses across all industries in Malaysia and around the world.
MIA’s international outlook and connections are reflected in its membership of regional and international professional organisations such as the International Federation of Accountants (IFAC) and the ASEAN Federation of Accountants (AFA). For more information on MIA, visit www.mia.org.my
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