Tuesday, March 20, 2012

Few professionals take up Iskandar tax perks

Business Times: Tue, Mar 20
ONLY a handful of professionals have taken advantage of Iskandar Malaysia's special tax incentives in specified sectors since the programme was introduced some four years ago.

'Hardly two dozen individuals have taken up the incentive,' said Iskandar Regional Development Authority (Irda) chief executive Ismail Ibrahim.

Of those that have, most are education and healthcare professionals, he said at a media conference in conjunction with the Global Special Economic Zones Summit in Kuala Lumpur.

To drive interest in the zone, Malaysia is dangling a reduced income tax rate of 15 per cent to knowledge workers in a number of service sectors including green technology, biotech, and financial advisory, if they apply and commence work in Iskandar by the end of 2015. The tax rate is considerably lower than the 26 per cent rate levied on those in the top pay bracket.

Qualifying companies can also take advantage of across-the-board tax relief and incentives including pioneer status and investment and reinvestment tax allowances.

But executives have observed that many Iskandar tax incentives overlap with other carrots given by government agencies such as the Malaysian Investment Development Authority.

This is perhaps why Mr Ismail observed the Iskandar incentives were 'not becoming the all-important factor' to whether companies choose to invest.

Many have, as evident in the near RM85 billion (S$35.4 billion) in committed investments - or an average of RM17 billion a year - the special economic zone in Johor has attracted since its launch at the end of 2006.

These include investments in a number of service sectors and manufacturing, but a huge chunk is also targeted at real estate development...

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Martin Koh/ Sherry Tang
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