KUALA LUMPUR, Oct 21 — The introduction of a two per cent tax on dividend income exceeding RM100,000 for individual shareholders, beginning in the 2025 assessment year, reflects an equitable contribution towards Malaysia’s tax revenue by different segments, said Treasury secretary-general Datuk Johan Mahmood Merican.
Similar to wage earners in Malaysia who pay higher taxes as their income increases, individuals who earn income through dividends, whether they own a business or hold significant shares, should also contribute to taxes.
“The government is being more progressive to meet the needs of those in need by requiring those who are able to contribute to do so.
“If the person earns more than RM100,000, then the person pays an additional two per cent. In fact, for someone who earns RM100,000, if it is you or me (wage earner), we are already paying 19 per cent tax,” he told the press on the sidelines of the Post-Budget 2025 Debate organised by the Malaysian Economic Association today.
He reiterated that this is a category the government believes can afford to contribute to its efforts to broaden the tax base.
Prime Minister Datuk Seri Anwar Ibrahim, who is also the Finance Minister, announced this while presenting Budget 2025 in the Dewan Rakyat on Friday (October 18).
Anwar said this initiative aims to diversify income tax sources, ensuring that revenue is not solely reliant on contributions from wage earners, but includes earnings from company owners and individuals with substantial shareholdings.
— Bernama
