'Global minimum tax shifts MNCs' investment focus to skilled talent'

KUALA LUMPUR: The implementation of the global minimum tax is changing the factors influencing multinational companies' (MNCs) investment decisions, Malaysian Investment Development Authority (Mida) said.

The availability of skilled talent has become increasingly important, it added.

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 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 at the Tax Budget and Me 2027 here yesterday.

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."

In addition, he said the 2027 Budget reflected the government's continued commitment to progressive taxation.

Tengku Zafrul added that this provided more relief for the middle class, lower taxes for small businesses, slightly higher taxes for those earning above RM1 million, and additional help for those repaying their National Higher Education Fund Corp loans.