Govt to consider extending HOC campaign to secondary marts
Published on: Saturday, October 23, 2021
By: Bernama
.jpg "Govt to consider extending HOC campaign to secondary marts")
Kuala Lumpur: The government may consider extending the Home Ownership Campaign (HOC) campaign to the secondary markets, thereby providing a wider range of properties for homebuyers to choose from, according to Deloitte Malaysia.In a statement titled “2022 Pre-Budget Expectations Q&A”, its tax experts said the current HOC only applies to new properties registered under the campaign by specific developers.
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“The HOC, which is available until Dec 31, 2021, may be extended to boost the property market,” the professional services firm said.
For those struggling to repay their home loans, Deloitte Malaysia said, the government could consider providing income tax relief on interest accrued on these loans after the moratorium period ends.
“For those in the bottom 40 per cent household income (B40) category, the government could consider incentivising the financial institutions to waive the interest accrued by providing additional tax deductions,” it added. .
On losses saddled by banks after businesses close down and credit taken goes bad, the firm said this has a knock-on effect on future lending.
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Hence, it advised the government to look at how tax rules can help cushion this blow, such as by incentivising business rescue financing, similar to how financial rescue of abandoned housing projects was incentivised several years ago, and by giving a special tax credit equal to the losses suffered as a result of debts going bad.
“Tax incentives can also be used to encourage lending and investment in specific projects and market segments in line with the government’s objectives such as tax breaks for investors in strategic infrastructure projects that improve Internet connectivity, environmentally sustainable projects, and projects that support the B40 community,” the company said.
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Deloitte Malaysia also commented on several measures to increase tax revenue proposed by the Finance Ministry in its 2022 Pre-Budget Statement, including the implementation of a Special Voluntary Disclosure Programme (SVDP) for indirect taxes and introduction of a Tax Compliance Certificate (TCC) as a pre-condition for tenderers to participate in government procurement.
On SVDP, the firm said the programme is a first for indirect tax, with the previous only being run for income taxes.
“While we are expecting specific details to be released in Budget 2022, it is likely to cover all taxes administered by the Royal Malaysian Customs Department, including the Sales and Service Tax, the former Goods and Services Tax, customs and excise duties, and tourism tax,” it said.
On the TCC issuance, Deloitte Malaysia said it is unclear if this would entail a tax audit but to be effective, some form of tax audit should be undertaken to ensure compliance.
“This would encourage taxpayers to opt for voluntary audit before tendering for government projects,” it said.
Regarding reliefs for individual taxpayers, Deloitte Malaysia suggested that the government consider additional tax reliefs for expenses incurred during the pandemic such as Covid-19 self-test kits, polymerase chain reaction (PCR) or antigen tests, “working from home” set up costs, or a one-off special tax relief of RM2,000 which was introduced in the year of assessment 2015.
“We also hope the government will give due consideration to exempt employee allowances or benefits received, where employers provided financial aid to employees or their family members on the costs of Covid-19 treatment and medical supplies for virus prevention purposes,” the company said.
On insurance tax relief, Deloitte Malaysia suggested widening the life insurance tax relief, which is currently given only to the taxpayer and spouse, to grant parents relief when buying insurance for children.
“It is also timely to consider splitting the tax relief for medical and education insurance into separate reliefs to encourage better take-up of medical coverage.
“As such, they won’t have to choose between protecting their health and saving for their children’s education,” it added.
On the impact of a Global Minimum Tax (GMT) deal to companies in Malaysia, the professional services firm said although there is an agreement in-principle for a GMT rate, the Organisation for Economic Cooperation and Development/G20 statement acknowledges that all countries are sovereign and may decide their own tax policies.
“However, harmful tax competition and aggressive tax planning need to end.
“If a Malaysian company is part of a global multinational enterprise (MNE) and its effective tax rate is lower than 15 per cent due to tax incentives, then it is likely that the MNE group would be subject to top-up tax covering its Malaysian operations in the jurisdiction of its headquarters.
“This would represent an overall increase in taxation for the group, hence negating the incentive benefits,” the company said.Stay up-to-date by following Daily Express’s Telegram channel.
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