BUDGET 2024

KPMG URGES GOVT TO COME OUT WITH CLEAR MECHANISM FOR CGT

16/10/2023 01:49 PM

KUALA LUMPUR, Oct 16 (Bernama) -- The government needs to come out with a clear mechanism on how the Capital Gains Tax (CGT) works to avoid double taxation, said KPMG Malaysia. 

Its head of tax Soh Lian Seng said currently, Malaysia collects tax on profits made from selling shares in real property companies under the Real Property Gains Tax Act 1976. 

“Perhaps, clarification is required when people are not sure how the mechanism going to work. People will then tend to think that it is a difficult system. So my advice is let us wait for the mechanism to be out. 

“It is important for businesses to wait for clear guidelines and legislation, and trust that a reasonable transition period as well as potential exemptions are essential for a successful implementation,” he said at the Financial Planning Association of Malaysia’s post-Budget 2024 media roundtable today.

Meanwhile, Soh opined that the CGT will have a short-term impact on the merger and acquisition (M&A) deals, given the lack of understanding of how the mechanism works. 

He hoped that the mechanism may provide a certain partial exemption to some of the key potential transactions. 

“With that, hopefully, it will not deter whatever M&A initiatives they have. If you ask me at the moment, I will say yes, (and) with the clear legislation and guidelines, hopefully it can be resolved,” he said. 

The CGT was announced in Budget 2024 by Prime Minister Datuk Seri Anwar Ibrahim. 

He said the government will enforce the imposition of 10 per cent CGT on shares in unlisted companies effective March 1, 2024, with certain exemptions for share disposals related to the initial public offering activities, internal restructuring, and venture capital companies.

-- BERNAMA 


 

 

© 2024 BERNAMA   • Disclaimer   • Privacy Policy   • Security Policy