In a written parliamentary reply, Anwar said the RM100,000 threshold meant that the tax was unlikely to impact small business owners or investors.

He added that the first RM100,000 of dividend income earned by taxable individuals would be exempted at the statutory income level, and that the tax would only be imposed on amounts exceeding the RM100,000 threshold.

“The 2% tax rate also takes into account the allowable deductions and exemptions.

“Therefore, in terms of the projected additional revenue, the implementation of the dividend tax is not expected to have a significant impact on the government’s revenue collection.

“The 2% dividend tax rate is very low compared with other countries that impose taxes on similar dividend income,” said Anwar, who is also prime minister.

He added that the Treasury was still in the process of estimating how much Putrajaya would collect through the 2% dividend tax this year.

Anwar reiterated his stand that the dividend tax would not affect investments or the Malaysian capital market, adding that Putrajaya would monitor the Bursa’s performance and developments.

“The government wants to stress that the imposition of the dividend tax is based on the principles of justice and fairness, as it is one of the methods to tax individuals who generate an income from investments, which at this juncture is not taxed at the shareholder level.

“The main objective of implementing the dividend tax is to ensure a more progressive and fair individual income tax structure, thereby broadening the tax base.”

He was responding to Ku Abd Rahman Ku Ismail (PN-Kubang Pasu), who asked about the government’s projected collection from the dividend tax and whether the new tax scheme would cause investors, either foreign or local, to consider investing in other countries instead.