Kota Kinabalu: The Federal Government is preparing the people to be vaccinated against Covid-19 when available next year or sooner and other diseases preventable like the few hepatitis A-B-C risks with vaccines.
Under Budget 2021, medical treatment of serious illness (personal, spouse and child) inclusive RM500 for full medical check-up has been increased from the current RM6,000 to maximum RM8,000 inclusive of RM1,000 for vaccine cost and RM1,000 for full medical check-up (increased from RM500).
While the government has not signed any firm guarantee Covid-19 vaccine supply agreement and paid in advance for early expedited delivery of any booked Covid-19 vaccine supply to vaccinate Malaysians, Budget 2021 incentivises pharmaceutical companies making Covid-19 vaccines to set up factories in Malaysia with tax incentives.
The tax incentives for companies manufacturing pharmaceutical products including vaccines was explained by Tax Director of Messrs. Cheng & Co., accountant Lam Kwai Soo
(pic) in a G&A Group organised Zoom seminar “2021 Budget Talk & CEO Outlook” moderated by Dato’ George Lim of G&A Group, recently.
He said: “The Federal Government offers manufacturers of pharmaceutical products including vaccines, especially Covid-19 vaccines, to invest in Malaysia.”
“The tax incentives are:
- Income tax rate of 0 per cent up to 10 per cent for the first 10 years.
- Income tax rate of 10 per cent for the subsequent period of 10 years.
“Apart from these tax incentives, other facilities including grants, import duty / sales tax exemption for machinery and equipment as well as materials are offered.” Lam said the application to MIDA is open from Nov 7 to Dec 31, 2022.
Individual maximum tax relief for expenses for medical treatment, special needs and parental care has been increased from the current RM5,000 to RM8,000 with effect from 2021. This reflects the inflation rate, devalued ringgit depreciation, and higher costs of medicine and consultation fees.
“Disabled spouse relief has been increased from the current RM3,500 to RM5,000 with effect from 2021. On flexible work arrangement, employers get further tax deduction with income tax exemption of up to RM5,000 for an employee receiving handphone, notebook and tablet smart devices.”
On tax incentive for export of private healthcare services, Lam said, “The tax incentive for export of private healthcare services under Budget 2021 has been extended for another two years effective from Jan 1, 2021 to Dec 31, 2022. Private healthcare services are eligible to claim increased export allowance equivalent to 100 per cent of the value of the increased in export of services to be off-set against 70 per cent of the Statutory Income (SI) with the following conditions:
- At least 10 per cent of the total number of patients receiving the private healthcare services for a year of assessment comprise of qualified healthcare travellers; and
- At least 10 per cent of the company’s gross income for each year of assessment is derived from qualified healthcare travellers.
The tourism sector also promotes health tourism gets tourism tax exemption with effect from July 1, 2020 to June 30, 2021, and the hotel industry gets service tax exemption extended to Dec 31, 2021, with deferment of tax instalment payment for the tourism industry to Dec 31, 2020.
“Under Penjana, for renovation and refurbishment for any business premises, a special tax deduction on costs of renovation and refurbishment is limited to RM300,000. The valid period for claim is extended to Dec 31, 2021 only.”
