M'sia has to
develop, attract and retain the best global talent to survive
Comment by Irene Ang and Rozarita
Rosli
HIGHLY skilled workers are sought after by various organisations
globally.
Since no economy will be able to survive without a
highly-skilled talent base, it is imperative for Malaysia to develop, attract
and retain the best global talent.
As the nation embarks on the important mission towards becoming
a progressive and high income nation as envisioned in Vision 2020, a key issue
in the 2011 Budget would be developing the right affirmative-action policies to
attract local and foreign talent, and reducing the outflow of local talent.
One of the steps to attract and retain talent would be to reduce
the personal income tax rates.
Last year, the Government reduced the maximum rate by 1% to 26%
for individuals with chargeable income exceeding RM100,000.
A further reduction in the top marginal rate to 25% would ensure
consistency with the current corporate tax rate of 25%.
The chart illustrates the comparison of the top marginal rates
of some of our neighbouring countries.
NEW
SYSTEM FOR COMPANIES
The
Expatriate Services Division (ESD) has set up an online system for companies.
The system will cater to the needs of companies for the Employment Pass,
Residence Pass-Talent, Professional Visit Pass, Dependent Pass and Long Term
Social Visit Pass.
Features of the new online system:
-Transparent
-Faster
-Real
time status tracking
-Minimised
checklists
-Expatriate
notification management services
-Online
payment
Companies
need to submit documentation only
once to
get registered with ESD.
To register as a company or know more visit: www.esd.imi.gov.my
Although the top marginal rate in Malaysia is generally lower
than most of the countries indicated, Malaysian taxpayers would hit the top
marginal rate of 26% if their chargeable income exceeds RM100,000.
In comparison, taxpayers in Singapore would only hit the top
marginal rate of 20% if their chargeable income exceeds S$320,000 (about
RM764,320).
As part of Malaysia’s effort to attract foreign talent, it
should consider a review of the tax rates.
A reduction in the tax rates and the widening of the tax bracket
will particularly appeal to higher income earners to continue working in
Malaysia and will also attract foreign talent to work in Malaysia as these
measures will enable them to retain a higher level of disposable income.
In the last Budget, the Government introduced an incentive to
attract foreign and local talent into Malaysia via Iskandar Malaysia.
Iskandar Malaysia is set to attract world-class talent to pursue
their career prospects there.
Knowledge workers residing and working in Iskandar Malaysia
would be subject to a flat rate of 15% on their chargeable income.
The incentive is for those who apply and commence work in
Iskandar Malaysia before the end of 2015 and they will enjoy it indefinitely.
As the tax rate in Iskandar Malaysia is even lower than some of
the countries in the region, the incentive would make Iskandar Malaysia an
attractive work destination in Malaysia.
One of the recently much-discussed measures introduced by the
Government under the 10th Malaysia Plan to attract and retain talent is the
establishment of the Talent Corporation (TC).
TC will commence operations in 2011 and has the objective of
attracting, motivating and retaining the talent needed for a high-income
economy.
Currently, it is estimated that more than 700,000 Malaysians,
many of whom are highly skilled professionals, are working and living abroad.
Furthermore, the Government is looking at ways to address the
shortage of skilled talent in our country in order to increase the ability to
attract high-technology industries.
Based on the 10th Malaysia Plan, TC together with the
Immigration Department will actively develop measures to attract skilled
foreign talent into Malaysia.
In this respect, the Government is working to further improve
and simplify the current processes of hiring foreign talent. This can be
achieved by aligning and benchmarking our work permit requirements with the
more liberal ones of other high- income countries.
Initiatives by the Government in allowing more flexibility and
mobility for skilled foreign talent earning above RM8,000 per month and open
visas to highly skilled foreign professionals would encourage the inflow of
highly skilled foreign talent, and this in turn will help alleviate the
shortage of local talent.
The 2011 Budget is essential to transforming Malaysia into a
high- income nation. The right affirmative action policies in place will
ultimately assist in developing and retaining the much-needed world-class
talent in Malaysia, and in tackling the constraints in our human capital.
This article was
written by Ernst & Young Tax Consultants Sdn Bhd director Irene Ang senior
manager Rozarita Rosli, with contribution from Tan Lay Keng, partner.
The information
contained in this article is intended for general guidance only. It is not
intended to be a substitute for detailed research or the exercise of
professional judgment. On any specific matter, reference should be made to the
appropriate advisor
(Adapted from theStar Online: Wednesday October 13, 2010)
10 REASONS TO WORK IN MALAYSIA
Malaysia is a
relatively peaceful and stable country. Stability is probably one of the top
reasons that determines an expatriate’s move to another country.
2 INFRASTRUCTURE
|
Malaysia has
good infrastructure such as a world-class airport, an extensive road network
and sound financial institutions.
3 PROPERTY OWNERSHIP
|
The Malaysia My
Second Home programme offers expatriates the opportunity of staying in the
country long-term. The programme offers a 10-year renewable visa, plus other
incentives such as dependency passes for immediate family and a tax-free
vehicle.
4 HEALTHCARE
|
Healthcare
services are efficient and private hospitals offer treatments that are on par
with world standards, at a substantially lower cost than many other countries.
5 NATURAL BEAUTY
|
There is a
wealth of flora and fauna. We have the sea, islands, highlands, jungles and
beaches which draw visitors from far and wide.
6 FOOD
|
Malaysia is a
food paradise. Expatriates are spoilt for choice for the variety of local and
foreign cuisine. From Malay, Chinese, Indian, Japanese, Thai, South Korean,
Arabian, Persian, Vietnamese to Western food, we have it all. They will never
go hungry because there is food 24/7.
7 THE PEOPLE AND LANGUAGE
|
The Malaysians
are generally friendly and accommodating. Expatriates settle down quite easily
because English is widely spoken, especially in urban and city centres.
8 THE WEATHER
|
Malaysia is
fortunate not to experience extreme weather such as hurricanes nor devastating
natural disasters such as earthquakes.
9 COST OF LIVING
|
To expatriates, cost
of living in Malaysia is relatively low. Property prices are also lower than in
Europe and the United States.
It is incredible
that in the world’s top 10 biggest malls in 2013, our shopping malls took three
spots in the list. We have designer label boutiques that expatriates are
familiar with, so they can feel at home.
Others
