KUALA LUMPUR, 5 March 2025 – The Malaysian government has reaffirmed that there are no immediate plans to lower the country’s corporate tax rate, citing the need to maintain fiscal stability, economic growth, and national development priorities. The statement was made by the Ministry of Finance (MoF) in response to speculation about potential tax reductions.
Balancing Economic Growth and Revenue Generation
Malaysia’s corporate income tax rate currently stands at 24%, in line with regional counterparts. The MoF emphasized that any adjustments to taxation must be carefully evaluated to ensure it does not compromise revenue collection needed for infrastructure development, healthcare, and education.
“Our priority is to strike a balance between maintaining Malaysia’s attractiveness to businesses and ensuring sustainable economic growth,” said Deputy Finance Minister Datuk Seri Ahmad Maslan.
Why the Government is Maintaining the Current Rate
- Revenue Sustainability – Corporate taxes remain a significant source of government revenue, contributing to public sector investment and essential services.
- Global Economic Uncertainty – With fluctuating global markets, Malaysia is focused on maintaining a resilient fiscal policy.
- Ongoing Tax Reform Measures – The government is working on other revenue enhancement strategies, including digital taxation and expanding the tax base.
- Investment-Friendly Policies – Instead of tax cuts, Malaysia is offering targeted incentives, grants, and business-friendly reforms to attract foreign direct investment (FDI).
Comparing Malaysia’s Corporate Tax with ASEAN Peers
Malaysia’s 24% corporate tax rate is competitive compared to:
- Singapore: 17% (but with stricter compliance regulations)
- Thailand: 20%
- Indonesia: 22%
- Vietnam: 20%
However, Malaysia’s tax incentives for key industries, such as semiconductors, renewable energy, and digital economy sectors, provide added attractiveness to investors.
Government’s Alternative Strategies for Economic Growth
While corporate tax rates remain unchanged, the government is introducing alternative measures to stimulate economic activity:
- Strengthening SME Support Programs – Expanding financial aid and grants for small and medium enterprises (SMEs).
- Encouraging Foreign Direct Investment (FDI) – Through tax reliefs and business-friendly policies.
- Expanding Digital Taxation – Ensuring fair tax contributions from multinational digital service providers.
“We are actively ensuring Malaysia remains an attractive investment destination through comprehensive economic policies, rather than relying solely on tax reductions,” added Ahmad Maslan.
Incentives and Grants
The MoF will continue monitoring global economic trends and domestic business needs before making any changes to the corporate tax framework. Businesses are encouraged to explore Malaysia’s various investment incentives, grants, and alternative financing programs.
For further updates on Malaysia’s economic policies, business climate, and tax regulations, stay tuned to ForwardMalaysia.my.
