KUALA LUMPUR (Oct 29): Prime Minister Datuk Seri Anwar Ibrahim said on Tuesday that the proposed 2% tax will apply to dividends income received from both listed and privately held companies.
Anwar said that the 2% tax rate was reduced from an initially proposed 5%, in response to appeals from small and medium-sized enterprises (SMEs).
“Generally, only individuals with assets exceeding RM2 million would receive dividends over RM100,000, so they would only need to pay around RM700 to RM800. This is not too burdensome,” Anwar said during the prime minister’s question time in the lower house of Parliament.
Anwar was responding to Kota Melaka Member of Parliament Khoo Poay Tiong, who suggested that the dividend tax be introduced gradually, and be initially applied only to dividends from listed companies.
The 2% dividend tax, announced during the presentation of Budget 2025, will take effect in the 2025 assessment year on annual dividend income exceeding RM100,000 received by individual shareholders.
Concerns have been raised by some quarters that the proposed tax could hinder SMEs from expanding, as many business owners rely on dividends, instead of salaries, due to cash flow constraints.
Anwar emphasised that the dividend tax would be applied progressively, and welcomed suggestions on implementing the tax, except for those opposed to taxing the wealthy.
T15 income threshold still under discussion
Meanwhile, Anwar noted that the government has yet to finalise the income threshold for the T15 group (the nation’s top 15% income bracket) concerning targeted subsidies for RON95 petrol.
Anwar mentioned that the Department of Statistics’ threshold for the T15 group — about RM13,000 in monthly household income — may be too low from the government’s perspective.
“The matter is being discussed by the Ministry of Finance, the Ministry of Economy, the Ministry of Domestic Trade and Cost of Living, and related departments, to slightly increase the T15 threshold, so that it does not burden families,” Anwar said.
Anwar also defended the government’s shift from blanket- to targeted subsidies, explaining that this would mean only the “ultra-rich” and foreigners would pay market rates for petrol, while 85% of the population would continue to benefit from subsidies.
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