Malaysia’s government raised the tax bracket for the rich earning RM2 million above to 30 per cent in a bid to generate more revenue and is allowing foreigners to buy property at a minimum value of RM600,000.
Minister of Finance Lim Guan Eng announced it when tabling the Budget 2020 on Friday, and added the tax for the rich will only affect 2,000 households.
Observers believe the move will draw support from the majority of Malaysians amid growing anger over rising income inequality.
The tax rate for the top 5 per cent income earners is currently 28 per cent, and Lim said this will make the tax structure more progressive while the government projects its income tax to rise to RM244.5 billion in 2020.
The country will also introduce a Tax Identification Number for all businesses or Malaysians above 18 who earn an income, meaning to say that any 18-year-olds who have some income will be taxed.
The country also reduced the threshold for foreigners to purchase urban high-rise properties from RM1 million to RM600,000 next year.
Lim said this was to reduce supply overhang of condominiums and apartments amounting to RM8.3bil in the second quarter of 2019.
But the government will assist youths in purchasing their first home.
The government will extend the Youth Housing Scheme administered by Bank Simpanan Nasional from Jan 1, 2020, until Dec 31, 2021, offering a 10% loan guarantee through Cagamas to enable borrowers of full financing and RM200 monthly instalment assistance for the first two years limited to 10,000 home units.
The Minister of Finance also said lower-income groups were also assisted with purchasing their first home with the launch of “Fund for Affordable Home” by Bank Negara in January this year. /TISG