Brunei - Corporates to get tax credit for hiring Bruneians

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TO ENCOURAGE the employment of Bruneians in private companies, the government will be granting a tax credit of as much as 50 per cent of a Bruneian employee's basic salary to the company for the first 36 months for those employed from January 1, 2012 , provided the employees basic salary doesn't exceed $3,000 a month.

The Second Minister of Finance at the Prime Minister's Office, YB Pehin Orang Kaya Laila Setia Dato Seri Setia Hj Abdul Rahman Hj Ibrahim while announcing the estimated national budget for the fiscal 2012/2013 at the Eighth Legislative Council (LegCo) session yesterday, said that the "Recruitment Incentive for Bruneians in the Private Sector" is part of the government's constant review of its tax incentive to encourage corporates' confidence in increasing investment in the country; to develop or improve business enterprises' efficiency and productivity, as well as to attract more Bruneians to work in the private sector.

"To reduce the dependence of foreign workers and increase opportunities for Bruneians in the private sector, a tax credit of 50 per cent of the total basic salary paid will be given," he said.

The minister said that this tax credit incentive was intended to encourage companies to hire more Bruneians without "financially burdening them".

"With this incentive, the government will actually bear more than 70 per cent of the cost of salary paid to new employees for the corporate taxpayers," said YB Pehin Dato Hj Abdul Rahman, adding that it is hoped the incentive would encourage private companies to offer better salaries to attract Bruneians to the private sector.

Besides that, YB Pehin Dato Hj Abdul Rahman also announced that the government will be reducing Corporate Income Taxes from 22 per cent to 20 per cent for the Assessment Year of 2012.

This reduction of the Corporate Income Tax is aimed at reducing the financial burden on companies; to promote revenue gains which can be re-invested to expand business operations; and for private companies to remain competitive and improve their facilities.

"The purpose of this is for businesses to improve the efficiency and productivity, as well as to attract more Bruneians to work in the private sector," he said.

In this regard, the minister said that His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam has agreed to amend the provisions of the Income Tax Act (Chapter 35).

YB Pehin Dato Hj Abdul Rahman had announced the reduction of corporate taxes to 22 per cent in 2011 from the previous 23.5 per cent during the Seventh LegCo meeting.

YB Pehin Dato Hj Abdul Rahman also announced a "Tax Credit on Bruneians Employed Under Training or Course", that allows companies to help Bruneians workers attend training or courses at institutions accredited with the government.

"The government will allow the cost of payment for basic salaries of Bruneians, to a maximum basic salary of $2,000 a month, to be 100 per cent tax creditable over the period of the training or course," he said.

YB Pehin Dato Hj Abdul Rahman hoped that this will ease the financial burden on companies that are looking to raise their human resource capabilities, and at the same time, increasing the capacity of Bruneian employees.

In addition to the above incentives, YB Pehin Dato Hj Abdul Rahman also announced that the government will implement a reduction in custom taxes for some goods which comes into effect April 1, 2012.

"The purpose is to reduce business costs and exports in Brunei," he said.

The changes see reduction in customs tax on machinery and industrial equipment using electricity from 20 per cent to five per cent; and heavy machinery which are currently subject to custom taxes of 20 per cent will be reduced to five per cent.

GOH DE NO

The Brunei Times

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