DEWAN NEGARA PASSES FIVE BILLS RELATED TO BUSINESS ACTIVITIES IN LABUAN

KUALA LUMPUR, Dec 18 (Bernama) -- The Dewan Negara has passed five bills under the Ministry of Finance related to business activities in Labuan, namely the Labuan Business Activity Tax (Amendment) (No.2) Bill 2024 and the Labuan Companies (Amendment) Bill 2024.

Also approved were the Labuan Trusts (Amendment) Bill 2024, the Labuan Foundation Law (Amendment) Bill 2024, and the Labuan Limited Partnerships and Limited Liability Partnerships (Amendment) Bill 2024.

Deputy Finance Minister Lim Hui Ying said the amendment to the Labuan Business Activity Tax (Amendment) (No.2) Bill 2024 aims to amend the Labuan Business Activity Tax Act 1990 to improve the tax administration structure of Labuan.

She stated that the improvement would involve the introduction of a self-assessment system, the implementation of current-year base assessments, and the submission of documents to the Director-General of Inland Revenue via electronic means.

Lim said the government remains committed to improving tax administration, increasing tax compliance, and strengthening public trust in the country’s tax system.

“Efforts to curb tax revenue leakage will continue. Engagement sessions will proceed with Labuan industry players and tax practitioners to review the proposed tax reforms accepted by the government,” she added.

Regarding tax distribution, Lim said the government would continue to focus on the development of Labuan’s infrastructure.

For the Labuan Companies (Amendment) Bill 2024, Lim said the bill aims to amend the Labuan Companies Act 1990 (Act 441) by incorporating new provisions related to the framework for reporting and disclosing beneficial ownership information.

She added that Malaysia, including the Labuan International Business and Financial Centre (Labuan IBFC), will undergo its fourth evaluation by the international body, Financial Action Task Force (FATF), scheduled for February 2025.

“This bill needs to be tabled and approved in Parliament promptly as part of preparations for the evaluation to ensure that Malaysia and Labuan IBFC receive a good rating, which will further enhance Malaysia and Labuan IBFC’s image and attract foreign investments to Malaysia,” said Lim.

She emphasised that this amendment would stimulate Labuan’s economy by creating job opportunities, aligning with the Labuan FSA Strategic Roadmap 2022-2026, which has the potential to bring development opportunities to Labuan, particularly in new sectors such as digital finance, Islamic finance captives, and asset management.

Regarding the Labuan Trusts (Amendment) Bill 2024, Lim said the bill aims to amend the Labuan Trusts Act 1996 (Act 554).

She added that the primary purpose of the amendment is to introduce new provisions related to the framework for reporting and disclosing beneficial ownership information, in line with the best international financial practices recommended by FATF.

“This bill will also abolish elements identified as harmful tax practices under the international tax standards of the Organisation for Economic Cooperation and Development,” she said.

The bill contains six clauses, including amendments to Section 54 of Act 554 to increase the maximum penalty from RM10,000 to RM50,000.

-- BERNAMA