KUALA LUMPUR, Oct 9 — A total of 300,000 micro, small and medium enterprises (MSMEs) in Malaysia are expected to have additional income of up to RM6,000 each amid expected lower taxes, as the federal government will be cutting their income tax rates, Prime Minister Datuk Seri Anwar Ibrahim said today.

As a response to MSMEs’ concerns over rising operating costs, Anwar said the federal government has agreed to reduce their income tax rates by one percentage point:

• For the first RM150,000 in taxable income, the tax rate will be reduced to 14 per cent;
• For the taxable income from RM150,000 to RM600,000, the tax rate will be reduced to 16 per cent.

Anwar also listed various proposed tax measures, including increasing the limit for each small value assets eligible for capital allowance to RM3,000, while non-MSMEs will have the overall claim limit increased to RM30,000.

Another proposed measure is to allow manufacturers to reclaim sales tax on machines, replacement parts and equipment purchased from local traders or local distributors, which will cover raw materials to produce pharmaceutical products, animal feed, fertiliser and pesticides.

Anwar said the government also proposes to extend the existing Accelerated Capital Allowance on capital expenditure for plant, machinery and ICT equipment for businesses until December 31, 2030.

He said the government will also propose only RM10 in stamp duty for agreements for loans through peer-to-peer platforms from January 1, 2027 until December 31, 2030, and full stamp duty exemption for the opening of saving accounts and current accounts starting from January 1, 2027.

To ease MSMEs’ cash flow via credit facilities from banks for mid-tier companies, he also said the government proposes a stamp duty of only RM10 for agreements to use excess credit that are executed from January 1, 2027 to December 31, 2030.