Amir Hamzah said the focus of CGT would be on gains from the disposal of unlisted shares by companies.
KUALA LUMPUR: The government has agreed on exempting unit trusts from capital gains tax (CGT) and taxes on foreign-sourced income (FSI), providing a friendlier investment environment for Malaysians.
Second Finance Minister Datuk Seri Amir Hamzah Azizan said this decision came following various engagements on the matter and one of the unintended area impacted by the CGT is unit trusts, of which over 90% of unit trust holders are individuals.
“This is to ensure that the rakyat will continue to benefit wholly from the gains of their hard-earned money and invest for their future,” he said in his keynote address at the launch of Bursa Malaysia as a multi-asset exchange yesterday.
He added that the focus of CGT, introduced by the government in Budget 2024, would be on gains from the disposal of unlisted shares by companies while disposals of listed shares and disposals by individuals are not subject to CGT.
Amir Hamzah said the exemption on FSI tax takes effect from Jan 1, 2024 until Dec 31, 2026, while the exemption on CGT is effective from Jan 1, 2024 until Dec 31, 2028.
The minister officiated at the launch of Bursa Malaysia’s new app for gold as an investment asset, Bursa Gold Dinar (BGD); new customer portal, MyBursa, new platform allowing investors to connect directly with dealer representatives, Bursa Reach; as well as the stock exchange’s new logo.
Bursa Malaysia Bhd
chairman Tan Sri Abdul Wahid Omar said the introduction of BGD was prompted by the high transaction costs associated with gold investments, which can reach as high as 9%.
In contrast, investment accounts with banks may incur fees ranging between 3% and 4%, he said.
Abdul Wahid said the local exchange aims to provide low transaction costs, as low as 2%, via the BGD app.
Bursa Malaysia chief executive officer Datuk Muhamad Umar Swift said the BGD is a syariah-compliant gold trading platform that allows Malaysians to invest in gold with as little as RM10 via a mobile application.
He explained that BGD is backed by real gold coins and bars, allowing investors to exchange every 4.25 grams of digital gold they own for a physical coin.
MyBursa is a customer-focused web platform equipped with investment tools to aid well-informed decision-making, providing access to research reports and carefully curated content, according to Muhamad Umar.
Meanwhile, investors, through Bursa Reach, can directly choose and interact with dealer representatives who offer tailored support for their investment needs.
On another note, Abdul Wahid said the local stock market witnessed a net foreign inflow of around RM448mil in the first 15 days of this year.
This marked an extension of buying momentum by foreign investors from the second half of last year.
In the first half of 2023 (1H23), Malaysia’s stock market experienced a net foreign outflow of RM4.2bil but saw a recovery in 2H23, with a net foreign inflow of RM2bil.
Abdul Wahid added that the local bourse recorded an average daily trading value (ADTV) of RM3.25bil in the first 15 days of 2024, marking an increase of 58% compared to RM2.06bil in ADTV recorded for the whole of 2023.
“As we move forward, obviously, it is coming from a low valuation, and with corporate earnings growing and with public listed companies performing better, we are hopeful that the market will continue to move along for 2024 compared to 2023,” he said.
Meanwhile, Amir Hamzah reiterated that the government is maintaining its projections for Malaysia’s economy to grow by 4% to 5% in 2024 despite the external volatility posing downside risks.
“This is underpinned by the government’s diligent efforts to bolster domestic demand and generate more investments into the country,” he added.
The minister noted that the reforms initiated by the Madani government are yielding green shoots.
“The Madani Economy framework has provided a clear roadmap to propel Malaysia to a higher economic value chain and breathed confidence into global investors.
“In the coming months and years, the government will see through the execution of these policy documents and ensure that Madani Economy’s vision will become a reality,” Amir Hamzah added.
