Kuala lumpur: The Dewan Rakyat today passed the Finance Bill 2025, which includes amendments to five tax acts: the Income Tax Act 1967, Real Property Gains Tax Act 1976, Stamp Act 1949, Labuan Business Activity Tax Act 1990, and the Petroleum (Income Tax) Act 1967.

According to BERNAMA News Agency, Deputy Finance Minister Lim Hui Ying announced the imposition of tax on the distribution of profit income from limited liability partnerships (LLPs) starting from the Year of Assessment 2026. This move aims to align tax treatment between individual partners and shareholders, following the implementation of a two per cent dividend tax beginning in 2025.

Lim clarified that the tax on LLP profit distributions is part of ongoing efforts to enhance the individual income tax structure. She added that the two per cent rate is minimal, and the RM100,000 threshold is not expected to burden partners. The government is considering a comprehensive impact assessment and reassessment of the rate to avoid affecting the growth of high-value services.

Addressing concerns about ‘double taxation’ from MPs for Pendang and Padang Rengas, Lim explained that LLPs only pay corporate income tax, while the two per cent tax applies to individual partners.

Regarding stamp duty and the self-assessment system, Lim stated that this approach aligns with international practices and involves electronic tax calculation and document submission. It facilitates business processes and boosts the country’s standing in the World Bank’s Business Ready initiative. The self-assessment system, introduced to corporate taxpayers in 2001 and individuals in 2003, has improved tax compliance and national revenue.

The Finance Bill 2025 was debated by MPs from Kampar, Pendang, Gerik, Bachok, Beruas, Tanjong Karang, Rantau Panjang, and Padang Rengas.

The Dewan Rakyat also approved the Measures for the Collection, Administration and Enforcement of Tax Bill 2025 at its third reading. Lim stated that the Bill includes administrative amendments to enhance tax collection and enforcement and promote digitalisation in tax administration.

She noted that the amendments aim to expand the use of digital platforms for tax filing, document processing, and refund verification, aligning with the national digitalisation policy. This Bill was discussed by MPs from Kota Melaka, Pendang, Gerik, Kampar, Dungun, and Temerloh.