KUALA LUMPUR – The Malaysian government is hoping to lure Malaysian professionals working abroad with a flat income tax rate of 15 per cent for five years under the Returning Experts Programme (REP).
Prime Minister Najib Razak said yesterday that the new transitional income tax incentive will be introduced alongside other incentives for returning Malaysian experts.
“I certainly hope these various changes will encourage more Malaysians working abroad with their varied experience and expertise to return and play an active part in our country’s economic transformation,” Mr Najib said at the opening of the Invest Malaysia 2011 conference.
His remarks drew gasps of surprise from conference delegates, reported The Malaysian Insider.
According to the Malaysian Industrial Development Authority’s website, resident individuals working in Malaysia are currently subjected to a graduated tax rate of up to 26 per cent on income earned in the country, after deducting personal reliefs. Individuals who do not meet residence requirements are taxed at a flat rate of 26 per cent.
Other changes in store include limiting the current tax-free incentive for two cars under the REP to locally-assembled vehicles, and the introduction of new Residence Passes which will allow highly-skilled foreign workers to stay in Malaysia for 10 years.
According to the World Bank, the number of Malaysians leaving the country rose by more than 100-fold in a 45-year period, from 9,576 Malaysian emigrants in 1960 to 1,489,168 in 2005.
In an effort to reverse the brain drain, the Najib administration launched the TalentCorp Malaysia agency last year to try and lure back the Malaysian diaspora and scout for foreign skilled professionals.
Mr Najib said that the TalentCorp will be taking the lead in the REP and has revised the programme parameters and qualifying criteria which will be announced in full at a later date.
Source : Todayonline