A their effort on the condition are provided more

A
tax incentive is an aspect of a
country’s tax code designed to
incentivize, or encourage a particular economic activity. A country or regional
use this to induce the certain business life cycle continually growth and
expansion. The purpose of this action is to attract new investors to fund in
our national compare to others tax systems are provided by other country or
region. Secondly, the tax incentive provides compensate the high rates in
certain categories. Besides, it helps to maintain tax relief become more
flexible and competitive to other national or region.

            In
Malaysia, government public agents have done this practice for decades. Views
on this practice have more effectiveness and efficiency toward all the party, it
is beneficiary to all aspect we have operate the business stated in working
paper of Inland Revues Board Malaysia. For this methodology, is more focus on majority
market participant, who can enjoy the opportunity to expand or encourage of the
new business to participate more of this business aspect. The effectiveness of
tax incentive lead the retaining existing ones or new business is more willing
to contribute their effort on the condition are provided more advantages toward
them. While the give to corporate seen like a welfare, but government do not
simply use their money without any exchange or pursuing towards for protecting
all of the communities needed such as education, health care, national defences,
road and so on.   Tax incentive is a
business idea such a company want to attract a potential customer to buy their
product as comparison to a retaining existing business or new business are to
stick with their decision-making of the any states provided an inducement
planning toward the corporate or new business. Everyone do business is
considered to the cost and benefits of the project to willingness to input
their fund to generate a considerable return. A business has the opportunity to
enjoy the lower rates as tax liability according to the tax incentive can
deduct their net income after tax payable as compulsory payments of the
taxpayers.

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            All
taxpayer also have gain specific tax relief by stated in working paper have
prepared by Inland Revenue Broad Malaysia. The view of tax payer have more
benefit as to minimum or exempt the tax payable. For example, Malaysia
Investment Development Authority encourage the green project as crucial  topic to induce those tax payers who are high
income can deduct their tax payable with against 70% of the statutory income ,
but the company need to approve by the MIDA that certain project is eligible as
under coverage  in the list of working
paper. Therefore, tax agents are compliance the budget following year to
appraisal current tax system to review and 
reallocate the rate of special industrial that could lower the certain
company’s tax liability.

 Government have announced a list of tax
incentive as possible as beneficiary all the industrial. The Angel investment is one of the issued
have been declared in currently budgeting 2018
as 27 Oct 2017. Angel Investor as a parent to take care their son or an
individual person is willing to contribute his fund a capital of
entrepreneurship business to run their business. This fund as angel investment.
According of this angel investment of the budgeting 2018 Malaysia stated that
currently, an angel investor is given a tax exemption equivalent to the amount
must be made in qualified investee company. An application must be made by the
angel investor to the minister of finance (MOF) no later than 31 December 2017.
To be part of qualifying criteria for the incentive to comply that angel
investor must be an individual in Malaysia and whose sources of income are not
derived sole from business. Secondly, angel investor must not have any family
members investing in the investee company. 
Thirdly, the investment is to solely finance the activities of the
investee company as approved by the MOF. Fourthly, the investment amount shall
not be more than 30% of total paid-up share capital of the investee company.
For an investee company must be a company incorporated under the Companies Act
1965 and resident in Malaysia. Therefore, Malaysian citizen have to hold at
least 51% of the company’s ordinary share capital. Besides that, the project
must carries as approved by the MOF.

            This
proposal is to attract prospective Angel Investors to contribute to the
economic activities of the investee companies through their investments. In
generally, this policy seems like as subsidy to new business which give more
flexible to them to have negotiation power to convince all the investor about
the burden of their funding to be taxable can be reduced after be part of the
shareholder of the company. Therefore, the investor can based on the current
performance of the business as reference to whether considered the project is
profitability or have a loss. In other hand, this policy also helps those young
generations to voice up their idea to create their own business as given them
an opportunity to be a successful entrepreneur in future. New feature or new
environment through the competitive marketing worldwide also a part of
stimulate our national reputation being well-know because those new business
without money is nothing to do or as possible to be a successful business.

           

In business concepts, the cost and benefit is more
important toward all the investor to be considerable the project are worthiness
to be funded. In fact, all the business has productivity result in previous
period that could attract more investor to the company. Additional funds for
the business to improve the cash flow. The companies have more ability to
payback debt to create a good image of their company. Furthermore, the company
has exceeded cash to ability to compete in a wider or even internal market to
produce more product target worldwide sales and increasing company reputation.
Otherwise, the company use the surplus cash to exchange valued asset. In
certain period, the company can sale off the asset exchange money to have more
turnover power overcome the contingency liability. Therefore, the company can
use this extra fund to have more professional training course offer to their
employee to acquire more new skill and knowledge as part of company ‘asset.
Besides that, the improved business operation is needed surplus cash to
implemented by the company which is produce more product, shorter the time
process, less labour hour, because of the advance technology machine
coordinated.

The next tax incentive budget in
Malaysia 2018 is stamp duty exemptions
for trading of Exchange Traded Funds (ETF) and Structured Warrants (SW); effective date for the trading of ETF
and SW executed from 1 January 2018 to
31 December 2020. It is declared that the stamp study exemptions will be
given on contract notes for trading of ETF and SW by investors. In the
current market, every RM1, 000 of contract notes will be charged at the rates
of RM1.00 as stamp duty. Besides, the trading of shares of listed companies on
Bursa Malaysia subject to a cap of RM200 for each contract note in order to
ensure the capital market in Malaysia remains competitive. Exchange Trade Funds
(ETF) is an open-ended investment fund listed and traded on a stock exchange
which had been introduced in 2005. Basically, ETF is a kind of risky investment
which the income or loss is based on an index that offers diversified portfolio
of investment. There are around 8 ETFs listed on the stock exchange market.
Structured Warrants (SW) is introduces since
2002 which is a security instrument listed on a stock exchange in Malaysia. It
is issued by financial institution or eligible broker to make the stock
exchange market workable. It provides the right to investors to buy or sell the
underlying instrument in the future for a fixed price or underlying asset such
as share, ETF of index.

Retrieved to an article, “Incentives for ETFs, structured warrants will boost Bursa’s vibrancy,
says Tajuddin Currently”– The Edge Markets. (2017, 27 Oct). p.1, “By announcing the two
exemptions, we are pleased that the government recognises the increasing
popularity of these two growing investment products,” said by chief
executive officer Datuk Seri Tajuddin Atan. This reflect that the market has
more people involved in this activities to gains extra income. The purpose of this
implementation is to further improve on development of capital market and
strengthen Malaysia’s capital market to become more competitive at the
international level. The exemption on stamp duty for trading in ETF and SW is
believed to boost trading, liquidity and vibrancy in the local capital market
in the future. Furthermore, this tax incentive will encourages Malaysian to
participate in the capital market as they get benefits in investment
and the return on investment can help to supplement their income or wealth
creation. In addition, more
Malaysian become financially literate and an
investing society since they are more interested in capital market. Moreover,
the economy in Malaysia will benefitted from high private investments.

As a conclusion, the national budget
has reinforces Malaysia’s strong fundamentals. According to exchange stock operator, he
described that budget 2018 is inclusive as it allows less privileged through
education, maintains equal economic and explores social opportunities for
investors. This reflects that the residents will obtain the benefits from the
incentive on tax regardless an individual’s background. Other than that, taxes
incentives develop the income level in the country. It also reduces the burden
of taxpayers as they pay lesser tax to IRB. Next, tax incentives improve the
Malaysia economy and the fiscal deficit year has declining over years.