Revisions To The Returning Expert Programme - Ensuring The Right Incentive For The Right Talent

KUALA LUMPUR, 26 March 2014 – YB Dato’ Sri Abdul Wahid Omar, Minister in the Prime Minister’s Department, today announced the following revisions to the Returning Expert Programme (REP):

1. Tax exemption on cars will be revised from currently two locally manufactured Complete Knocked Down (CKD) cars to one locally manufactured CKD or fully imported Complete Built Up (CBU) car per approved REP applicant, subject to a maximum of RM150,000 worth of tax exemption;

2. Refining and raising the bar on the REP eligibility with a more holistic set of criteria to be better aligned to the needs of the economy.

These revisions will take effect for all completed applications received after 15 April 2014.

“We must ensure the REP is optimised to facilitate the return of talented Malaysian professionals needed to drive the Economic Transformation Programme (ETP). In other words, we need the right REP incentives, to target the right talent,” said Dato’ Sri Abdul Wahid, who is also a member of TalenCorp's Board of Trustees. The announcement was made at a press conference convened after the monthly REP committee meeting which took place at Parliament today.

Reduction of CKD car tax incentive

The provision to buy a car tax free is a means to facilitate the transition of a returning Malaysian professional from abroad, taking into consideration that Malaysians abroad often work in jurisdictions with limited taxes on vehicles.

Currently, tax exemption is given for two CKD locally manufactured vehicles.

Under the revision, a successful REP applicant can only apply for tax exemption on either one locally manufactured CKD or one fully imported CBU car, subject to a maximum of RM150,000 worth of tax exemption.

The flexibility for tax exemption on an imported CBU car is provided to facilitate returning Malaysians who intend to bring back the car they currently own. Further, reducing the incentive to one car is in line with increasingly targeting high value-added Malaysian professionals, whereby the key facilitation should be more towards the transitional income tax rate.

REP eligibility criteria refinements

The Government has also decided to refine the REP eligibility criteria to be more holistic and take into account, not only qualifications and work experience abroad but also:

a) Work experience in Malaysia (prior to employment abroad);

b) Current salary abroad;and

c) Experience & expertise relevant to priority economic sector or area of critical skill gap.

The current criteria used in evaluating REP applications are anchored on qualifications (whether a bachelor’s degree, masters or PhD) and years of work experience abroad.

The criteria of years of work experience abroad is effectively being utilised for two matters: first, as a proxy for inertia or barriers to relocate back to Malaysia and second, as a proxy for the individual’s expertise. Whilst, years abroad capture better the impediment barrier to return, it has become apparent to be insufficient to proxy for expertise.

[Click here to download Appendix for comparison of the current and revised eligibility criteria]

The revised criteria will act as guidelines for the consideration of the REP committee to use in evaluating the REP applicants in conjunction with qualitative factors on the applicants’ value to the economy.

The REP was originally introduced in 2001 to address Malaysia’s growing talent needs by facilitating the return of experienced Malaysian professionals from abroad. The management of the programme was transferred to TalentCorp in January 2011.

Since 2011, more than 2,500 REP applications have been approved to date. This exceeds the total number of 1,130 applications approved over the 10 years prior (2001–2010). Previously REP applications were made only by the returning individuals. Since 2013, TalentCorp has increasingly facilitated applications from employers, ensuring those identified to return do meet the critical talent needs of leading Malaysian corporations.

The Malaysians who have returned under the REP comprise high-value C-suite professionals and technical experts mainly in the Oil, Gas & Energy, Financial Services, Information & Communication Technology (ICT), Healthcare, and Business Services sectors.

For further information on the REP and TalentCorp’s other initiatives, please visit www.talentcorp.com.my.

This press release is to be read together with the Minister’s statement. Click HERE to read