KUALA LUMPUR - Malaysia has exempted the imposition of capital gains tax and taxes on foreign-sourced income on unit trusts, said Second Finance Minister Amir Hamzah Azizan at an event on Jan 16.
The exemption on foreign-sourced income took effect from Jan 1, 2024 and will last until Dec 31, 2026. The exemption on capital gains tax also took effect from Jan 1, 2024, and it will be in force until Dec 31, 2028.
“This is to ensure that investors will continue to benefit wholly from the gains of their hard-earned money and continue to invest in the future,” he said at an event organised by Bursa Malaysia.
Datuk Seri Amir Hamzah, the former chief executive of the Employees Provident Fund, was appointed as second finance minister in December to assist Prime Minister Anwar Ibrahim, who is also Finance Minister.
In a speech, Mr Amir Hamzah noted that in the government’s engagement with various stakeholders, it realised that an unintended area impacted by the capital gains tax was unit trusts. More than 90 per cent of unit-trust holders in Malaysia are individuals, he said.
The government will impose a capital gains tax on the disposal of unlisted shares by companies starting from March 1, 2024. For shares acquired before that date, investors can choose to pay a capital gains tax of 2 per cent on the gross disposal value, or 10 per cent on the net gain on disposal.
During the event that Mr Amir Hamzah attended in Kuala Lumpur, Bursa Malaysia commemorated its pivot to a multi-asset exchange.
The bourse launched a new gold investment product – the Bursa Gold Dinar – and several solutions for investors, including a customer portal and a new platform to connect investors with dealer representatives. It also unveiled a new logo.
The Bursa Gold Dinar is a syariah-compliant gold trading platform, which allows Malaysian investors to use a mobile application to invest in gold with an investment of as low as RM10 (S$2.85).
The new platform provides options for investors to transfer gold to others and redeem every 4.25g of gold into a physical custom-designed coin.
“We are demystifying the notion that investing is difficult and costly, and that investments are only for a certain income bracket. Investing is for anyone with as much as they wish to start with,” said the bourse’s chairman Abdul Wahid Omar.
He added that the new launches are part of Bursa Malaysia’s efforts to democratise investment opportunities, capture fresh interest and encourage greater investor participation.
With the new addition of these asset investments, Bursa Malaysia chief executive Muhamad Umar Swift said he expects the bourse to operate as a competitive multi-asset exchange to promote financial inclusion and wealth creation.
At a separate press conference on Jan 16, Tan Sri Abdul Wahid said that some RM448 million worth of foreign funds flowed into the bourse in the first 15 days of 2024, which pushed the benchmark index to trade above the 1,500 level.
He said that the average daily trading volume (ADV) also went up to RM3.25 billion over that 15-day period – 15 per cent higher than the RM2.06 billion in ADV that was recorded for the whole of 2023.
“Coming from a low valuation, we are hopeful that the market will continue to grow in 2024,” he said.
Overall in 2023, Malaysia had the second-lowest foreign outflow among other securities markets in the region with an outflow of US$509 million (S$684 million), second only to Indonesia, said Mr Abdul Wahid.
“In contrast, other nations in the region experienced outflows ranging from US$863 million to US$5.5 billion,” he said. THE BUSINESS TIMES
