DIVIDEND TAX REDUCED TO 2 PCT IN RESPONSE TO MSME APPEALS - PM ANWAR

KUALA LUMPUR, Oct 29 (Bernama) -- The dividend tax, initially set at five per cent, has been reduced to two per cent after considering appeals, including those from micro, small and medium enterprises (MSMEs), said Prime Minister Datuk Seri Anwar Ibrahim.

Anwar, who is also the Finance Minister, noted that MSMEs had requested an exemption from the dividend tax, arguing that they differ from listed companies.

He expressed willingness to consider proposals regarding the implementation of the two per cent dividend tax announced in Budget 2025, but not those seeking exemptions.

“If there is a proposal for something else, that’s fine, but don’t propose that we can’t tax the wealthy. I find that a strange notion and contrary to our principle of fair wealth distribution,” he said during the minister’s question-and-answer session in the Dewan Rakyat today.

He made these remarks in response to a question from Khoo Poay Tiong (PH-Kota Melaka) about the mechanism for implementing the dividend tax on income exceeding RM100,000 for individual shareholders.

Anwar elaborated that the implementation of a dividend tax on individual shareholders will encompass shares in both listed and unlisted companies. 

He emphasised that fees will be charged only to those who can afford it, ensuring that the measure does not impose undue burdens.

He said this approach reflects a progressive taxation system.

“If a person holds RM2 million worth of shares yielding a dividend of RM100,000, they will only incur a tax of approximately RM800, which is manageable.

“It’s important to recognise that merely owning shares does not imply financial capability. Hence, our deliberations on this decision focus on levying a minimal fee on those who are financially able," he added.

-- BERNAMA