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Malaysian Paper

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Be prepared for 2026 tax challenges

KEPALA BATAS: The value of Malaysia’s exports reached RM1.45 trillion for the period of January to November this year, while total trade hit RM2.77 trillion for the same period. Malaysia External Trade Develop ment Corporation (Matrade) chairman Datuk Seri Reezal Merican Naina Merican said this marks the fifth consecutive year Malaysia has broken the trillion-ringgit trade barrier, putting the country on track to set a new full-year record. He said that compared with January to November last year, exports rose by nearly 6.1%, trade increased by 5.8% and imports grew by about 5.6%. “Meanwhile, the country’s trade surplus for the same period was recorded at RM132.5 billion, an increase of 10.7%, reflecting strong external trade performance,” he told reporters yesterday. Reezal Merican, who is also the Bertam state assemblyman, was met after a circumcision programme at a hotel, which was organised by his service centre and Umno Kepala Batas. The Matrade chairman said export growth was largely driven by strong demand for semiconductor products, which expanded 17.5%, pharma ceuticals, which rose 22.9%, and optical and scientific products, which increased by 10%. In terms of key markets, Asian countries remained Malaysia’s largest export destination, followed by the United States, China, the European Union and Hong Kong, with these five markets accounting for nearly 68.5% of total exports. Additionally, trade with countries with free trade agreements showed positive performance, increasing by 3.2% and accounting for about 66.8% of export value, including Mexico, Hong Kong, China, the United Arab Emirates, Chile, the United Kingdom and Canada. “What is even more encouraging is the marked increase in exports to new and emerging markets, particularly in Africa and Central Asia,” he said. Reezal said Prime Minister Datuk Seri Anwar Ibrahim’s official visits to several countries in Africa and Central Asia had a positive effect on trade performance, with the countries visited recording double-digit trade growth. He added that he is optimistic that Malaysia will record its highest export and trade values in history when the full performance figures for this year are announced on Jan 19. “I expect this year will set another record, meaning we are quite optimistic that exports will not only break the trillion mark but reach the highest figures in Malaysia’s history. Last year, it was RM1.51 trillion, and the previous high was RM1.55 trillion in 2022. “We are currently at RM1.45 trillion, and if we add another RM100 billion for this month, it will become RM1.55 trillion or RM1.56 trillion, surpassing the previous peak. The trade total of RM2.77 trillion will likely also be a record. Usually, this year’s figures will be known on Jan 19,” he said. – Bernama Exports for January to November reach RM1.45 trillion

PETALING JAYA: Chin Hin Group Bhd is confident about 2026, supported by strong earnings visibility, ongoing capacity ex pansion initiatives and disciplined execution across its integrated intrabuild ecosystem. Heading into 2026, the group is well-positioned for sustained mo mentum, underpinned by RM2.3 billion in unbilled property sales, a RM1.72 billion construction order book and a RM1.14 billion order book in its home and living segment. These pipelines provide clear revenue visibility across multiple divisions and reinforce Chin Hin’s ability to deliver consistent growth. Key growth drivers in 2026 include the completion and accele ration of strategic capacity ex pansions in the building materials sector. The group’s third autoclaved aerated concrete (AAC) plant in Serendah, Selangor, a RM80 million investment, is on track for completion and will feature the world’s largest single AAC production line, boasting a total AAC capacity of 2.2 million cubic metres annually. In tandem, Drymix Line C, com missioned in August, is expected to enhance margins and operational efficiency in the coming year. The group anticipates growing momentum for CoolPro, its inte grated energy-efficient building solution, as sustainability and Overall Thermal Transfer Value compliance continue to influence construction The shift to digitalisation continued with the introduction of the self-assessment system for Real Property Gains Tax, and to meet the corporate tax compliance require ments, it is now compulsory to submit supporting document-ation for your tax returns through the Malaysian Income Tax Reporting System. to their partners from 2026. E invoicing, which commenced in August 2024, has continued to bring in more sections of the business into the net. With the exemption now provided to businesses earning less than RM1 million, the e-invoicing rollout will be completed by Jan 1 2026 for businesses with turnover of RM1 million to RM5 million. THE Malaysian tax scene has been very active in 2025 with various important measures introduced on direct and indirect tax areas. On the indirect tax front, the tax base has been widened through the expansion of the service tax into education sector, health sector, financial services, rental/leasing and construction services. Meanwhile, several high value non-essential items have been brought into the 10% sales tax bracket and items subject to sales tax on importation have been widened. Excise duty was increased on alcoholic beverages and cigarettes. The direct tax arena has also been very active with the introduction of the 2% dividend tax on dividends received above RM100,000 which has now been expanded to include distributions made by limited liability partnerships

payments and benefits/perqui sites/allowances provided to em ployees. The IRB is cross-checking the information against the tax computations, general ledgers, and other financial sources. Fictitious transactions are a thing of the past as the tax officials are trained to “smoke out” recalcitrant taxpayers. It is also happening in the indirect tax front through post registration audits, verification of transaction audits, post-impor tation audits, and expanded infor mation disclosure for service tax purposes in Form SST-02 where there is now a requirement to show exempted, excluded and non taxable income. In 2026, you can also expect more information about Carbon Tax. For larger multinational groups whose turnover exceeds €750 million (about RM4 billion), the global minimum tax kicked in this year and the tax returns will have to be filed by June 30 2027. This article is contributed by Thannees Tax Consulting Services Sdn Bhd managing director SM Thanneermalai (www.thannees.com).

with policy pronouncements were issued over the past six months, there is still uncertainty among taxpayers on the aspect of inter pretation. This is particularly true in determining the value that should be brought to tax. An example would be the value that should be included in con struction services where it includes both services and materials. Another issue that leaves tax payers in uncertain territory is whether a contract is reviewable or not, since non-reviewable contracts will be eligible for a 12-month service tax moratorium. This is a similar problem that has moved from the Goods and Services Tax (GST) era to the SST era without a clear resolution. It looks like the courts will again be the final arbiters on this issue. With the increased use of artificial intelligence, digitalisation, sharing/mining information within the IRB and the RMCD, and the cross-sharing of information across different government agencies will significantly identify taxpayers who are practicing tax evasion and bring out the non-compliance. The opportunity to hide from the tax authorities will be more difficult starting with the declaration of the

Challenges in 2026 The main challenges for taxpayers will be the administrative reforms that is continuously being

introduced by the Inland Revenue Board (IRB) and the Royal Malaysian Customs Department (RMCD). There will be intensification of the compliance require

ments and the increase in the intensity of the audits with the relentless pursuit towards digitalising within the tax system. The most notable challenge in 2026 will be the self-assessment of stamp duty. Taxpayers will have difficulty in categorising the instruments and subjecting it to the correct tax under the First Schedule of the Stamp Act 1949. This is largely due to the outdated language used in the Stamp Act which was enacted more than 50 years ago in 1949. There is an urgent need to revamp this legislation with the aim of simplifying the language and filling the gaps that exists in the current legislation. Although the Sales and Service Tax (SST) was expanded in July 2025 and numerous guidelines together and development decisions. In addition, Chin Hin’s strategic joint venture with PTT Synergy Bhd to develop smart, sustainable logistics infrastructure under the PTT-Chin Hin Smart Logistic Hub platform positions the group to capitalise on rising demand for Industry 4.0-ready industrial assets. These forward-looking initiatives build on a solid foundation laid in 2025, a year marked by strong operational execution and portfolio optimisation. For the first nine months of FY25, Chin Hin delivered revenue of RM2.98 billion, up 32% year-on-year, while profit before tax rose 19% to RM199.7 million, reflecting broad based contributions from property development, construction, building materials and home and living solutions. Property development emerged as a key growth engine during the year, driven by steady progress across landmark projects including Dawn, Ayanna, Avantro, Quaver, Crown, Andalan, Aricia and Botanica Hills. The construction division re corded strong revenue growth driven by accelerated internal project execution. At the same time, Signature International Bhd capitalised on steady demand for premium home solutions to maintain solid per formance. Beyond financial performance, the group sharpened its strategic focus in 2025 through selective divestments of non-core assets,

Chin Hin confident of sustained momentum next year

strengthening its balance sheet and channelling capital into higher growth, higher-return segments. Chin Hin also accelerated group wide digitalisation initiatives and reinforced its environmental, social, and governance (ESG) agenda with product innovation and people centric programmes. This sustained emphasis on sustainability and responsible busi ness practices has also translated into external recognition. In 2025, two of the group’s listed entities – Ajiya Bhd and Signature International – achieved inclusion in the FTSE4Good Bursa Malaysia Index, a globally recognised bench mark for companies with strong ESG standards. Chin Hin group managing director Datuk Wira Chiau Haw Choon ( pic ) said that as the company enters 2026,

the focus is clear: to translate strategy into seamless execution, drive scalability and build resilience. “We have built a strong foun dation, and now we are poised to accelerate growth. With clear visi bility across property, construction, building materials and home and living, we are confident in moving forward decisively. “2025 was about strengthening our base, 2026 is about unlocking the next phase of sustainable, disciplined growth, while rigorously managing capital, risk and ESG commitments,” he said. With a diversified earnings base, strong order visibility and strategic initiatives aligned to long-term industry trends, Chin Hin is well-positioned to navigate evolving market conditions and deliver sustainable value in 2026 and beyond.