PETALING JAYA: The government has agreed to waive the capital gains tax (CGT) and taxes on foreign-sourced income (FSI) on unit trusts, says second finance minister Amir Hamzah Azizan.
Amir said the exemption on FSI is effective from Jan 1, 2024 until Dec 31, 2026, while the exemption on CGT is effective from Jan 1, 2024 until Dec 31, 2028.
“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 officiating speech at a Bursa Malaysia event.
Amir said the CGT exemption was in response to feedback the government had received on the matter.
“Through the various engagements we’ve had on this matter, it has come to our attention that one unintended area impacted by CGT is unit trusts, given that more than 90% of unit trust holders are individuals,” he said.
The CGT was first announced by Prime Minister Anwar Ibrahim in the revised 2023 budget in February last year.
In tabling the 2024 budget, Anwar said the government would impose CGT for the disposal of unlisted shares by local companies based on net profit at a rate of 10% from March 1, 2024.
The proposal to introduce CGT received mixed reviews, with some experts welcoming the move and others saying it would lead to substantial capital flight.
A tax exemption on FSI until 2026 was previously announced in 2022. The announcement was a backtrack from an earlier proposal in the 2022 budget to tax Malaysian residents on income sourced from abroad.
