The absence of a broad-based corporate tax cut in Budget 2004 is compensated by the increased tax threshold for small- and medium-scale enterprises (SMEs), according to the Malaysian Institute of Taxation (MIT).
MIT vice-president Dr Veerinderjeet Singh said the SME sector has certainly been given the focus in the new Budget. By moving up the threshold of a 20 per cent tax rate from the first RM100,000 in chargeable income to RM500,000, the impact will be more significant and beneficial to the SMEs, he added.
"This basically means a company will save RM40,000 on tax compared to RM8,000 last year.
"A lot of companies will stand to benefit from this, including the multinational corporations, as many of them have RM2.5 million and below in paid-up capital," he told Business Times in an interview.
