Malaysia's Sports Council seeks enhanced tax breaks to lure sponsors

Malaysia's National Sports Council (MSN) is actively seeking to boost corporate sponsorship for national sports development by enhancing tax incentives. The council, in collaboration with the Ministry of Youth and Sports (KBS), is preparing a proposal for the Cabinet outlining more attractive tax benefits for potential sponsors.

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We are preparing a paper together with KBS to bring to the Cabinet regarding more attractive tax facilities, and an announcement will be made by KBS.

MSN's Director-General, Jefri Ngadirin, noted that corporate sponsors frequently raised concerns about existing tax relief during previous engagement sessions. While past proposals, such as double taxation relief, were deemed impractical by the government, MSN is refining its approach.

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If possible, we want to increase it like what is implemented in Singapore, which is around 15 percent to my knowledge.

"We are preparing a paper together with KBS to bring to the Cabinet regarding more attractive tax facilities, and an announcement will be made by KBS," Jefri stated. MSN aims to increase the tax relief rate to be more competitive, potentially mirroring Singapore's approximately 15% incentive. However, the industry's primary request remains double taxation relief, which requires careful consideration and discussion among all relevant parties.

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However, what the industry has requested the most is double taxation relief, and that mechanism needs to be refined and discussed by all relevant parties.

Currently, companies sponsoring sports associations through MSN can claim a 10% tax deduction on their aggregate income under Subsection 44(6) tax exemption. This facility allows MSN to assist sports associations in offering added value to sponsors and simplifies the tax relief application process. Jefri added that while the current 10% deduction is beneficial, new incentives might be introduced, especially with the upcoming SEA Games.

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Through the facility of Subsection 44(6), we help associations obtain tax exemption for sponsors. For example, if Tenaga Nasional Berhad (TNB) sponsors the Malaysian Hockey Confederation (MHC), the application will go through MSN to get tax relief.