News: Malaysia government offers tax exemption for women who return to work

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Malaysia government offers tax exemption for women who return to work

Starting from 2019, the government will give individual tax exemptions of up to 12 months to returning women professionals.
Malaysia government offers tax exemption for women who return to work

To encourage women to return to work the government of Malaysia has offered to give individual tax exemptions for women professional returning to work. The exemption program would be supervised by Talent Corporation Malaysia Berhad (TalentCorp) and will last for a year. 

TalentCorp found out that Malaysia experiences a single peak phenomenon in its female labor force participation rate, when Malaysian women who leave the workforce, do not tend to return, unlike in countries such as Japan and Korea, where women return to work after a break. As female professionals constitute an integral part of the workforce, the government takes it upon itself to increase female participation rate. The individual tax exemption of up to 12 months for women who return to work is one such step in this direction. 

Human Resources Minister M. Kula Segaran said, “Women make up half of Malaysia’s population and almost half of the national workforce and if more women join the workforce, the Gross Domestic Product has the potential to increase to between RM6 Bn to RM9 Bn.”

The government will gauge the impact of the new benefit introduced and will measure how far the tax exemption will be able to influence female workforce participation. After one year, the benefit may or may not continue. 

The rising concern of attrition among women workforce 

In recent years, the gender ratio has improved for many nations in Southeast Asia (SEA, including Malaysia which experienced an increase in its Gender Gap Index from 0.692 to 0.697 in 2017. In fact, in the SEA region, the female workforce is 42%, above the global average of 39%. But still, there is a long way to go to achieve complete gender equality at work. 

One of the obstacles that hinder businesses to achieve its gender quality goal is increased attrition among women workforce. While gender ratio has improved in education with more and more girls completing school and pursuing higher education, the story remains almost the same when it comes to their participation at work. Women do join the labor market but soon after they leave their career for reasons like marriage or motherhood and don’t return to work as juggling with many responsibilities becomes more challenging. To help the women workforce and to support them in this changing face of life government and organizations have taken many measures like maternity leaves, childcare policies and career counseling, but still, attrition among women workforce remains an issue. 

Policies and benefits like maternity and now tax exemption for returning women professionals are only a part of the solution. Beyond these initiatives taken by organizations and government at the end of the day it’s the mindset that needs to change. The way a career of a woman is looked at by her and by the society has to be shifted.  

Topics: Diversity

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