Month: October 2024

KUALA LUMPUR, 21 OCTOBER 2024 – Talent Corporation Malaysia Berhad (TalentCorp) welcomes the progressive initiatives presented in Budget 2025, which aim to position Malaysia as a leader in technology, sustainability and innovation. The initiatives strike a crucial balance between driving economic progress and promoting the well-being of the people, ensuring that societal needs remain a priority. With a strong emphasis on government efficiency and improving public services, Budget 2025 sets the foundation for a more resilient nation ready for long-term success.

“Aligned with national goals, allocations in Budget 2025 support TalentCorp’s ongoing efforts to cultivate a skilled and resilient workforce capable of meeting evolving industry needs. As the strategic think tank of the Ministry of Human Resources (KESUMA), we collaborate closely with stakeholders to align Malaysia’s talent development strategies with the nation’s growth ambitions. Initiatives such as the MyMAHIR Future Skills Talent Council (FSTC) and the Malaysia Critical Occupations List (MyCOL) play crucial roles in identifying and addressing skills gaps, and taking steps to build a globally competitive workforce,” commented Thomas Mathew, Group Chief Executive Officer, Talent Corporation Malaysia Berhad.

Bridging Talent Gaps through Structured Internships

A prominent measure in Budget 2025 is the extension of the National Structured Internship Programme (MySIP) until 2030, now also incorporating students interning in regulatory bodies. This expansion aims to provide young talents with critical hands-on experience, enhancing their employability and ensuring a stronger alignment between education and industry requirements. The focus on expanding internship opportunities reflects a broader strategy to bridge the gap between academia and the professional world.

Another key initiative that supports this strategy is the Internship Matching Grant for SMEs and Start-ups (LiKES). Launched in March 2024, LiKES has received an additional RM10 million to support quality internships, particularly in STEM fields. By early October 2024, over 774 companies had registered under LiKES, hiring 6,000 interns across Malaysia. This funding aims to empower SMEs and start-ups, especially those outside major urban areas, providing them with the resources to nurture young talent and drive innovation.

Preparing the Workforce for a Changing Landscape

In parallel, the RM7.5 billion allocation towards Technical and Vocational Education and Training (TVET) is evidence of the government’s commitment to workforce readiness, with a focus on key sectors such as Maintenance, Repair and Overhaul (MRO), Electric Vehicles (EV), aerospace, and Artificial Intelligence (AI) to prepare Malaysians for the evolving landscape of emerging industries and economic demands. 

“By equipping the workforce with specialised skills, the government aims to future-proof Malaysia’s talent pool and strengthen its competitiveness in high-value industries. TalentCorp remains dedicated to supporting these efforts through initiatives that nurture high-value employment opportunities and foster a resilient talent ecosystem,” he added.

Promoting Work-Life Sustainability and Inclusive Practices

Budget 2025 extends tax incentives for employers hiring women returning to work after a career break. These incentives, valid for applications from 1 January 2018 to 31 December 2027, offer a 50% additional deduction on employment expenses for a 12-month period, encouraging greater female workforce participation.

Recognising the challenges faced by working caregivers, the government has introduced a 50% additional deduction for employers who provide paid caregiving leave of up to 12 months. This policy aligns with Malaysia’s broader care economy efforts to support job retention and promote work-life balance for employees fulfilling caregiving responsibilities for children, ill or disabled family members.

To further enhance workplace flexibility, Budget 2025 offers a one-off tax incentive for employers investing in capacity building and digital tools to implement flexible work arrangements (FWA). The expenses eligible for the incentive are capped at RM500,000 and must be verified by TalentCorp. “We are further playing a part in supporting work-life balance through TalentCorp’s Work-Life Sustainability advocacy programme, where we offer free workshops to assist employers in effectively implementing FWAs, reinforcing our commitment to fostering a healthier and balanced workforce,” Thomas Mathew remarked. 

Commited to Long-Term Success

Looking ahead, TalentCorp is geared up to maintain a robust pace in empowering Malaysia’s workforce to adapt and thrive in an evolving economic landscape. “By collaborating with industry leaders and stakeholders, we aim to catalyse a talent ecosystem that integrates innovation, sustainability and inclusivity, positioning Malaysia as a global hub for talent and innovation,” he concluded.

Budget 2025 was the largest Budget allocation ever at RM421 billion, with the objective of revitalizing the economy, catalyzing transformative change and improving the overall well-being of the Rakyat. The Budget strikes a strategic balance, reinforcing the nation’s commitment to fiscal resilience while navigating the challenges of the global and regional economic landscape and setting the foundation for long-term growth.

Riding the wave of robust growth from 2.9% in Q4 of 2023 to 5.9% in Q2 of 2024 and with a vision to further invigorate the economy to achieve a leading status in Asia, Budget 2025 has unveiled impactful and targeted measures, charting a course for sustainable prosperity and enhanced competitiveness.

Fiscal Sustainability, Economic Growth, and Debt Management

The Government has increasingly demonstrated its commitment to fiscal discipline, as evidenced by the enactment of the Public Finance and Fiscal Responsibility Act in December 2023 and the continued emphasis on reducing the fiscal deficit and national debt levels.

Following the rationalization of the diesel subsidy, Budget 2025 provides additional clarity on the Government’s approach and timeline for addressing the RON95 petrol subsidy. The RON95 rationalization exercise will be implemented in mid-2025 in a manner similar to the targeted electricity subsidy program, such that 85% of the Rakyat will not be adversely impacted. The savings from this exercise will be channeled to public welfare.  Whilst rationalization is fraught with complexities, we commend the Government for its efforts in taking this necessary and urgent action.

Broadening the tax base

In light of the decision not to reintroduce Goods and Services Tax (GST) at this stage, as expected, the Government will mobilize various other levers to bolster revenue collection. These include a 2% tax on dividend income exceeding RM100,000 received by individual shareholders (from the year of assessment 2025) and the expansion of the Sales Tax and Service Tax (SST) (effective May 2025) to encompass additional services and non-essential goods.

It is encouraging that the Government will involve stakeholders from the relevant industries to seek feedback before finalizing the SST scope expansion and tax rates, which will smoothen the implementation of the progressive SST system and avoid any unintended consequences.

In addition, there were other proposed tax measures such as carbon tax on iron and steel, and energy sectors (in 2026) and increase in the “sugar tax” starting from 1 January 2025. The revenue from such taxes will be earmarked for specific purposes (e.g. to finance research and green technology programs, cover public health expenditure).

Competitiveness in the Global Landscape

One of the key themes of the Budget is to attract more impactful investments, by introducing the New Investment Incentive Framework (NIIF) which focuses on high-value activities with positive economic spillover to the nation, moving away from existing incentives based on specific products. The NIIF is expected to be implemented in the third quarter of 2025.

Specific focus areas include the diversification of the Electrical and Electronics (E&E) sector through high-value-added activities, creating high-level income job opportunities in the field of artificial intelligence (AI), strengthening the local supply chain and primary sector ecosystems, state-specific economic clusters and ESG-driven investments. Through this more targeted approach, it is hoped that the implementation will attract the right kind of investments. We look forward to the details of the new framework.

The Government has noted that the introduction of Global Minimum Tax (GMT) rules in Malaysia will result in additional top-up taxes on low-taxed income of large multinational groups of companies, which may negatively impact the investment environment. To address this, the Government has committed to streamlining existing tax incentives, introducing non-tax incentives and studying the introduction of a “Strategic Investment Tax Credit”.  We expect this credit to be designed as a ‘Qualified Refundable Tax Credit’ (QRTC) that would be less affected by GMT rules, to give Malaysia a competitive edge in attracting foreign direct investments.

In parallel, there is also continued focus on public service reforms and good governance, including the proposed public administration efficiency commitment Bill which will cover three critical areas i.e. reducing bureaucracy, expediting processes, and improving service delivery.

These initiatives are a continuation of measures from previous MADANI Budgets to enhance Malaysia’s competitiveness. The results of the efforts taken to-date are evident from the increase of foreign direct investment (FDI) numbers, with Malaysia’s ASEAN ranking improving from 6th to 4th between 2020 and 2022.

Redistributing income and reducing inequality

Malaysia is poised to enact a series of fiscal reforms to strengthen its economy and advance its vision for sustainable and inclusive growth. In response to the rising cost of living and to narrow the wage gap, the Government plans to increase the minimum wage to RM1,700 and further enhance various cash assistance programs, as well as maintaining the RON95 subsidy for 85% of the Rakyat.

To boost national productivity and encourage inclusiveness, the Government is introducing incentives to expand the workforce while supporting diverse family and work arrangements. Employers will benefit from a 50% additional tax deduction for hiring women returning to work, implementing flexible work arrangements, and providing additional paid caregiving leave for employees caring for children or ill or disabled family members. We are optimistic that these incentives will accelerate an upward trend in female labor force participation.

Special tax rates will be introduced in 21 economic sectors in states such as Perlis, Kedah, Kelantan, Terengganu, Sabah and Sarawak, aimed at reducing regional economic disparities and promoting equitable development throughout the country. Various financing facilities are available to support the women, youth and people with disabilities to venture into business. These measures reflect Malaysia’s dedication to creating a robust economy that benefits all citizens.

Digital economy and Artificial Intelligence

Budget 2025 marks a significant step in Malaysia’s journey towards a digital future, with a series of initiatives aimed at strengthening the digital economy and accelerating the adoption of AI. These targeted measures, together with the USD16.9 billion of digital investments already secured by the country, will help propel Malaysia to the forefront of the digital economy and AI, ensuring the nation’s readiness for the opportunities and challenges of the digital age.

Recognizing the importance of digital skills, the proposed NIIF will include incentives to encourage development of qualifying new courses for AI, robotics, Internet of Things (IoT), data science, FinTech, and sustainable technology at Private Higher Education Institutions and private skills training institutions over the next 5 years.

To support digitalization of various industries, the Government has also announced tax incentives such as accelerated capital allowance to encourage use of drones and AI technology in plantation operations, thereby reducing dependence on foreign labor. Investors in Smart Logistics Complexes (SLCs) will be incentivized with a proposed 60% investment tax allowance for a period of 5 years, to be utilized against 70% of statutory income, aimed at stimulating growth and activity in this critical area. These initiatives underscore Malaysia’s dedication to maintaining a competitive edge in the digital era and equipping its workforce for the future.

In conclusion, Budget 2025 is a testament to the Government’s decisive policy making. This expansionary budget reflects a strong commitment to steering the nation towards a sustainable and thriving future by catalyzing growth in key sectors, revitalizing the economy and prospering the Rakyat. We look forward to the positive outcomes these initiatives will bring to the nation.

Kuching, 15 October 2024 – The Sarawak Multimedia Authority (SMA) has signed a
Memorandum of Understanding (MoU) with MEASAT Global Berhad (MEASAT),
Malaysia’s premier satellite solutions provider to enhance Sarawak’s space industry
development. The signing, witnessed by YB Dato Sri Julaihi Narawi, Minister for Utility
and Telecommunication. The MoU exchange ceremony will follow during the
International Digital Economy Conference Sarawak (IDECS) 2024 on 16 October 2024,
officiated by YAB Datuk Patinggi Tan Sri Abang Johari Tun Openg, Premier of Sarawak,
at the Borneo Convention Centre Kuching.

Under this MoU, MEASAT will serve as a consultant to the Sarawak Space Industry and
Satellite Committee (SISCOM) and offer industry expertise to shape policies, guidelines
and the future of space and satellite industries in Sarawak. This also includes training
and talent development, leveraging MEASAT’s 30 over years of experience in satellite
management and service commercialisation.

As part of the collaboration, SMA and MEASAT will explore joint projects, including
satellite operations and management, the development of space, satellite, and launching
policies, guidelines, training, and industry development. The private-public partnership
will bring economic benefit to the State while enhancing Sarawak’s satellite capabilities.

“The collaboration between SMA and MEASAT marks a pivotal moment for Sarawak’s
ambitions in the space industry. By harnessing MEASAT’s satellite expertise, we are
paving the way for greater connectivity, particularly in rural areas, while laying the
foundation for Sarawak to manage its own satellite systems. This partnership is key to
achieving our 2030 goals of satellite self-sufficiency, which will also contribute towards
elevating our policymaking capabilities with advanced data collection and analysis,”
commented YB Dato Sri Julaihi Narawi, Minister for Utility and Telecommunication.

“SMA is committed to fostering open collaboration to explore innovative strategies for
enhancing Sarawak’s connectivity and strengthening its digital infrastructure. SMA’s
partnership with MEASAT is a significant step forward in building a robust space industry
in Sarawak. With MEASAT’s vast experience, this collaboration will allow us to undertake
joint projects, nurture local talent and expertise in Sarawak’s nascent aerospace sector,
and position the state as a leader in satellite technology, besides driving overall
economic growth,” said Dato Dr Anderson Tiong Ing Heng, General Manager, Sarawak
Multimedia Authority.

“MEASAT is honoured to be part of this initiative with SMA to advance Sarawak’s space
ambitions. By providing our industry expertise, we aim to contribute to the development
of satellite technologies that benefit Sarawak’s communities and government operations,
ultimately supporting the state’s broader objectives,” added Yau Chyong Lim, Chief
Operating Officer, MEASAT.