KUALA LUMPUR (Nov 12): The impact of the one-off Cukai Makmur (prosperity tax) recently announced in Budget 2022 is expected to be manageable for local banks, according to Bank Negara Malaysia (BNM) governor Datuk Nor Shamsiah Mohd Yunus.
Speaking during the virtual third-quarter gross domestic product announcement on Friday (Nov 12), Nor Shamsiah said although the one-off tax may lower banks’ retained earnings next year, the domestic financial institutions’ growth will be supported by various factors.
“Banks' profitability and growth are expected to be supported by strong loan growth as the country recovers from prolonged effects of the Covid-19 pandemic.
“Banks also stand to benefit from the potentially lower provision next year amid some improvements in the credit risk outlook,” she said.
In the Budget 2022 announcement, the government introduced the prosperity tax on companies (other than micro, small and medium enterprises) that generate high income during the Covid-19 period, effective the year of assessment 2022.
Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said Cukai Makmur would only be applicable to super profitable companies with chargeable income of above RM100 million for the tax assessment year of 2022.
Chargeable income above RM100 million will be taxed at 33%, while a 24% tax rate applies to chargeable income of up to RM100 million.
Digital banking
Meanwhile, Nor Shamsiah also provided an update on digital banking licence applications and highlighted that the central bank is currently processing the applications.
“Like what I announced earlier, the granting of digital banking licences will be announced by the first quarter of next year,” she said.
Previously in July 2021, BNM announced that it had received a total of 29 applications for digital banking licences.
“A diverse range of parties have submitted applications for digital bank licences, ranging from banks to industry conglomerates, technology firms, e-commerce operators, fintech (financial technology) players, cooperatives and state governments.
“Successful applicants that meet all prudential criteria will be expected to contribute towards greater financial inclusion by offering products and services to address market gaps in the underserved and unserved segments. This includes promoting suitable and affordable financial solutions by leveraging innovative application of technology.
“Up to five licences may be issued and notification of successful applications will be made in the first quarter of 2022,” the central bank said in an announcement in July.