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Budget wishlist: Crowdfunding industry hopes for 5-year tax relief

Last update: 12/10/2018
 
KUALA LUMPUR, Oct 12 (Bernama) -- The crowdfunding industry hopes the government will provide tax relief for investors investing in the small and medium enterprises (SMEs) via peer-to-peer (P2P) lending platform and equity crowdfunding (ECF) platform for at least in the next five years. 

Peoplender Sdn Bhd Chief Executive Officer (CEO) Kristine Ng said that because the industry is still relatively new in Malaysia, it was important for the government to drive interest and acceptance of the public to help spur the awareness and growth of the industry. 

She hoped the government through the 2019 Budget would be able to provide the tax relief because at the point when most investors pay their taxes, their risks have not been totally relinquished.

"For example, at the point of me declaring my tax as an investor, I could earn that amount (returns), but that amount is not the absolute because the investment notes are still under repayment. 

"So, what if the investment notes end one month after I have declared? Whatever I’ve earn, I’ve paid the government via taxes, but I may risk losing my capital, and I cannot claim back from the government the taxes that has already been paid," Ng said in response to the 2019 Budget wishlist. 

She said the tax relief for five years would be helpful and fair based on those risks that investors had to take, which is up to three years, in helping to finance the SMEs. 

"If investors do not invest, merely because there is tax involved and that after paying taxes and they lose their money even more, then they will not be interested in the industry anymore. We will also not be able to fill the financing gap in terms of why the industry was set up in the first place," she said.

Peoplender owns and manages Fundaztic, a finance technology startup which operates a peer-to-peer (P2P) financing platform. 

Meanwhile, Pitch Platforms Sdn Bhd CEO Sam Shafie who runs an ECF platform, pitchIN, hoped that the present government would continue with the idea of setting up a special fund which allows corporate bodies to invest in it and enjoy some tax rebates over a certain amount that they have invested in. 

"In the last budget by the previous government administration, there was a thought about it, which we think is still a good idea. The fund is supposed to be allocated to venture capitals which can then invest in companies undertaking fundraising via ECF or companies that are generally doing fundraising.

"There was some efforts on this...but we did not see the end product," said Sam.

He said the fund, if it materialises, could support more funding activities of SMEs because a lot of potentially good companies would seek assistance from other countries when they fail to get help internally. 

"We do not want to lose these talents and taxes that they are paying. We need to keep them here in the country, help them and the ecosystem through funding," Sam added. 

-- BERNAMA

 

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