KUALA LUMPUR: The implementation of the global minimum tax is changing the factors influencing multinational companies’ (MNCs) investment decisions, with the availability of skilled talent becoming increasingly important, said the Malaysian Investment Development Authority (MIDA).
Chairman Tengku Datuk Seri Zafrul Abdul Aziz said Malaysia and its regional competitors adopted the global minimum tax, which requires MNCs to pay a 15 per cent minimum effective tax rate (ETR), regardless of their investment destination.
"Tax holidays do not drive investors the way they used to. Talent does. You are the reason they come,” he said in his keynote address at the Tax Budget and Me (TBAM) 2027.
He said investors looking to establish investments, including semiconductor plants and chip design centres, were essentially investing in Malaysia's talent pool.
"And you will be the ones who make sure that investment keeps its promises: that the books are clean, incentives are earned, and taxes are paid in full,” he said.
In addition, he said Budget 2027 reflected the government’s continued commitment to progressive taxation, which sees more relief for the middle class, lower taxes for small businesses, a bit more tax from those earning above RM1 million, and a bit more help for those repaying their National Higher Education Fund Corporation (PTPTN) loans.
"As the Prime Minister said, the government remains committed to progressive taxation.
"In return, the government must keep earning your trust. So, hold us to account. Ask where your money goes. That is the social contract working as it should,” he said. - Bernama
