KUALA LUMPUR: Finance Minister Lim Guan Eng said today that even with the two-percentage point increase in the income tax rate for those with taxable income in excess of RM2 million, the percentage remains among the lowest in the region.
He said the new tax band was inspired by a proposal from the World Bank – which set an even higher rate of 35 per cent.
“Even by increasing it to 30 per cent, we’re still among the lowest (compared with neighbouring countries), but we don’t believe (in) harsh and abrupt measures and we just keep it at 30 per cent,” he said at the Budget 2020 Forum here, today.
Lim added that the government views the increase as being within the taxpayers’ means.
While tabling the 2020 Budget on Friday, Lim said a new band for taxable income above RM2 million will be introduced, and taxed at 30 per cent – up from the present rate of 28 per cent – to ensure a more progressive personal income tax structure.
The increase will affect about 2,000 top income earners in the country.
The Budget 2020 Forum was jointly organised by Malayan Banking Bhd, CGS-CIMB Securities Sdn Bhd and RHB Banking Group to provide a platform for government officials, industry experts and corporates to share their views and expectations on the 2020 Budget. – Bernama