On 6 November 2020, the Minister of Finance Tengku Datuk Seri Zafrul Abdul Tengku Abdul Aziz unveiled the annual budget speech in Parliament for 2021. The following tax measures has been proposed under the budget 2021.
- A new tax incentive scheme, namely Global Trading Centre, is proposed for companies to benefit from 10% income tax rate for a period of 5 years and renewable for an additional five years.
- Relocation incentives for selected services sector including an income tax rate of 0% for new companies (for a 10-year period) and 10% for existing companies with a new services sector (for a 10-year period). The scope of tax incentives be expanded to companies in selected service sectors, including companies adapting Industrial Revolution 4.0 and digitalisation technology for certain investments.
- To encourage manufacturers of pharmaceutical products, including vaccines (especially a COVID-19 vaccine), to invest in Malaysia, the Budget 2021 proposes a tax rate of 0% up to 10% for the first 10 years, and a tax rate of 10% for the subsequent period of 10 years. Strategic investments by such companies may be considered for other facilities including grants, import duty/sales tax exemption for machineries and equipment, as well as raw materials.
- To promote the export of private healthcare services in Malaysia and attract high value healthcare travellers, the Budget 2021 proposes that the incentive be further extended until the year of assessment 2022.
- To further improve technology adaptation in the construction sector through usage of IBS, the Budget 2021 proposes that that the current IBS tax incentives be extended for a period of 5 years and merged.
