Wednesday, April 13, 2011

The Star: Incentive will curb brain drain, say employers

Incentive will curb brain drain, say employers

PETALING JAYA: The 15% income tax incentive offered by the Government to encourage more Malaysian professionals working abroad to return is a right step in curbing the brain drain, said the Malaysian Employers Federation (MEF).

MEF secretary Datuk Thavalingam Thava­rajah said income tax was a major factor to consider for employees.

Yesterday, Prime Minister Datuk Seri Najib Tun Razak announced that returning Malaysian professionals would be eligible for a flat rate of 15% income tax for five years.

Thavalingam said the 15% tax was very attractive compared with the maximum tax bracket of 26%.
“The tax incentive is certainly attractive and five years is appropriate to induce the experts to relocate,” he said.

Former human resource minister and economist Tan Sri Dr Fong Chan Onn also lauded the move, saying it was attractive and enticing.

“This will go a long way in enticing Malaysian professionals working abroad to return home.

“The flat rate of 15% tax incentive is highly competitive compared with countries such as Singapore and Hong Kong,” he said.

Fong said the move would also boost the country’s economic transformation as it would help bring new talents into the workforce, in particular those in specialised fields.

Malaysian Medical Association (MMA) president Dr David Quek, however, said that while any incentive to attract talent was welcomed, the 15% tax appeared to be a temporary stop-gap measure.

“Those who returned earlier will be unhappy as they appear to have been discriminated against,” Dr Quek said.

“What about those who have faithfully returned after training and postgraduate studies to work immediately in the service of other Malaysians?

“MMA believes that talent recruitment must be systematic and policy driven and not subject to whims and changes which appear unfair to others.”

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