CIMB IB says Malaysia could widen corporate tax base for Budget 2027, cut old deductions
CIMB Investment Bank suggests that Malaysia could broaden its corporate tax base for the 2027 budget by reviewing long-standing tax deductions. The move aims to increase government revenue while potentially allowing for a lower headline corporate tax rate.
Why it matters
Fiscal policy adjustments in Malaysia could influence investor sentiment and the country's competitive standing in the region.
BURSA SGX Home Budget 2027 Make The Edge Malaysia your preferred source on Google KUALA LUMPUR (Oct 5): Malaysia could widen its corporate tax base by reviewing special and double deductions that have been in place for two to three decades, and remove deductions that no longer serve their original purpose, said CIMB Investment Bank.
CIMB IB said, citing KPMG senior adviser on tax policy Dr Verrinderjeet Singh during a discussion, that the removal of selected deductions could lead to the government collecting more revenue while creating room for a lower headline corporate tax rate.
“His [Verrinderjeet] proposal is selective: investment incentives remain important for attracting businesses, but their benefits need closer scrutiny. He links Malaysia’s shift towards outcome-based incentives to its response to Global Minimum Tax,” said CIMB IB.
It added, “Their effectiveness will depend on monitoring whether investors deliver the intended economic benefits”.
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