Budget 2024 has been tabled by Prime Minister Datuk Seri Anwar Ibrahim last Friday, with a record allocation of RM393.8 billion, up from the previous amount of RM388.1 billion allocated for the revised Budget 2023. Positioned as “a continuation of the Ekonomi Madani framework” and the second Madani Budget, it contains numerous initiatives that are aimed at reforming the economic structure and raise the standard of living of the rakyat.

Included in latest national budget are the introduction of several new tax-related initiatives, as well as revisions and extensions provided for existing ones. We’ve compiled a list of the relevant initiatives for your easy reference here.

Tax relief for medical expenses expanded to include dental treatment

Under Budget 2023, the medical expenses tax relief for self, spouse, and child was increased from RM8,000 to RM10,000 to cover various expenditures. These include serious illness and fertility treatment, full medical check-up and Covid-19 tests, as well mental health examination and rehabilitation treatment for children with learning disabilities.

The prime minister proposed to further expand the scope of this tax relief under Budget 2024, to cover dental examination and treatment expenses from dental practitioners who are registered with the Malaysian Dental Council. It will be limited to RM1,000 (out of the total RM10,000 tax relief allowed).

Tax relief for parents’ care expanded to include full medical examination

Taxpayers are currently allowed to claim up to RM8,000 in tax relief for the medical treatment, special needs, and carer expenses for their parents. It currently includes treatment at clinics/hospitals and nursing homes, dental treatment (excluding cosmetic dental treatment), as well as care and treatment at registered nursing homes, daycare centres, or residential care centres.

Under Budget 2024, the scope of this tax relief will be expanded to include full medical examination for parents, limited to RM1,000 (out of the total RM8,000 tax relief allowed).

Tax relief for lifestyle to be reviewed and restructured

The income tax relief for lifestyle of up to RM2,500 is currently claimable for the purchase of the following items:  

• Reading materials (books, journals, magazines, printed newspapers, and other publications in hardcopy and electronic forms)
• Personal computer, smartphone, and tablets
• Sports equipment for sports activities (including golf balls, shuttlecocks, and gym membership)
• Internet subscription paid through monthly bill registered under your own name

Under Budget 2024, this tax relief will restructured so that it excludes the purchase of sports equipment and gym membership fees. Instead, it will be expanded to include fees for self-improvement courses.

New tax relief of for sports equipment and activities, up to RM1,000

The expenses incurred from sports equipment and activities will now have its own specific tax relief, provided up to RM1,000. This is in a bid to encourage a healthier lifestyle among Malaysians. Its scope will cover the following expenditures:

• Purchase of sports equipment
• Rental or entry fees to sports facilities
• Registration fees for participating in sports competition
• Gym membership fees
• Sports training fees imposed by associations and clubs registered with the Sports Commissioner or Companies Commission of Malaysia, carrying out sports activities as listed under the Sports Development Act 1997

Tax relief for upskilling and self-enhancement courses fees extended until year of assessment (YA) 2026

Taxpayers are currently allowed to claim RM2,000 out of the total RM7,000 education fees tax relief for upskilling and self-enhancement course payments, provided until YA 2023. This allowance will now be extended until YA 2026 under Budget 2024, in an effort to encourage the people to improve their skills and venture into new fields.

Tax relief for electric vehicle (EV) charging facilities extended until YA 2027

The government had previously allowed tax relief of up to RM2,500 on expenses incurred from the installation, rental, purchase (inclusive of hire-purchase), and subscription of EV charging facilities, up to YA 2023. It will now be extended for another four years until YA 2027.

For businesses, the tax deduction for EV rental costs will also be extended for a period of two years.

Tax exemption for childcare allowance increased from RM2,400 to RM3,000

Employees are currently allowed to enjoy up to RM2,400 tax exemption on childcare allowances received from their employers (inclusive of direct payments from employers to childcare centres). This amount will be increased to RM3,000 per year, effective from YA 2024.

Introduction of capital gains tax on disposal of unlisted shares

Malaysia currently does not impose tax on gains from the disposal of shares, except for shares in real property companies.

Under Budget 2024, the government has proposed the implementation of the capital gains tax on the disposal of unlisted shares for companies as per the following rate:

Shares acquisition date	Capital gains tax rate
Before 1 March 2024	Taxpayers may choose: – 10% on the net gain of the disposal of shares – 2% on gross sales value
1 March 2024 onwards	10% on net gain of the disposal of shares

The capital gains tax will be exempted for the disposal of certain shares, namely initial public offerings (IPOs) approved by Bursa Malaysia and the restructuring of shares within the same group.

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With this, we hope that you’ll have a better understanding of the tax-related initiatives that have been proposed under Budget 2024. You can also keep up to date with the main highlights of Budget 2024 through our infographic here!

• TAGS:
• Capital Gains Tax
• Childcare Tax Relief
• Education Tax Relief
• EV Tax Relief
• Income Tax Reliefs
• Lifestyle Tax Relief
• Longform
• Medical Tax Relief
• Tax Reliefs