Government to offer additional tax deductions for firms adopting flexible work arrangements
Human Resources Minister Steven Sim said that the government will provide additional tax deductions to companies adopting flexible work arrangements (FWAs). He said the initiative promotes flexible work practices, fostering better work-life balance and progressive workplace environments.
“It is not enough to simply launch guidelines. During the 2025 Budget, Prime Minister, Datuk Seri Anwar Ibrahim, announced that companies implementing these initiatives will be eligible for additional tax deductions. “This reflects the government’s sincerity and determination to promote a more progressive and conducive work environment. The aim is to create healthier, safer, and more comfortable workplaces for employees, contributing to the development of society as a whole,” he said in Kuala Lumpur Thursday.
Sim also highlighted that adopting FWAs benefits employees and helps address broader societal challenges, such as reducing traffic congestion in major cities. The campaign will initially target urban areas, including Penang, the Klang Valley, and Johor Bahru. He added that the locations were chosen as they are hubs for businesses, including SMEs, and implementing FWAs in these areas can provide the added benefit of easing traffic congestion.
Sim noted that as of October 2014, more than 3,000 companies have attended FWA implementation workshops, though the target for this year has yet to be finalised. He added that over the next six months, TalentCorp will conduct a study to evaluate the impact of FWAs on productivity and other factors. “While international reports suggest that productivity remains unaffected, the study will analyse these findings within the Malaysian context. “As part of the initiative, a tracer study will be carried out to assess the effects of implementing FWAs on participating companies,” he said.
