Putrajaya creates new income tax category for super-rich at 30 pct rate

The government will introduce a new income tier for those with a taxable income of more than RM2 million per annum.

Finance Minister Lim Guan Eng said the new income tax tier, announced under Budget 2020, will take effect for the next assessment year.

"To ensure a more progressive personal income tax structure, it is proposed that a new band for taxable income in excess of RM2 million be introduced and taxed at 30 percent, which is a two percentage point increase from the current 28 percent rate.

"This increase will affect approximately 2,000 top income earners in the country," he told the Dewan Rakyat when tabling the Budget 2020 this evening.

Those earning between RM1 million and RM2 million will still pay a tax rate of 28 percent.

Previously, those earning more than RM2 million were considered in the same category as those earning between RM1 million and RM2 million.

Lim said in an effort to improve tax collection, the government also intends to assign to tax identification number to all individuals when they hit 18-years-old beginning 2021.

"Beginning January 2021, Malaysians above the age of 18 and corporate entities will be assigned a Tax Identification Number (TIN).

"In order to implement this initiative, engagement sessions with all stakeholders will commence next year," he said.