KUALA LUMPUR: Exempting foreign-sourced income on unit trusts from the Capital Gains Tax (CGT) will boost the performance of the capital market, the Dewan Rakyat was told today.
Deputy Finance Minister Lim Hui Ying said the exemption would reduce the projected revenue of RM800 million per year from CGT. The new tax regime was announced by the government last year.
But "the government believes that exempting unit trusts from CGT will enhance the performance of the capital market, benefiting more than 90 per cent of individual investors in the industry".
"This exemption also aims to ensure that unit trusts remain an attractive investment option and accessible to the public.
"Furthermore, they provide greater returns to individual investors, many of whom are in the pre-retirement and early retirement groups," she said in response to Ahmad Fadhli Shaari (PN-Pasir Mas).
Fadhli asked if the exemption would affect the projected CGT income of RM800 million stated by the government in November last year.
Lim said the projection was based on share-transfer trends in the past few years.
Implementation of the CGT began on March 1.
Second Finance Minister Datuk Seri Amir Hamzah Azizan announced the exemption on Jan 17.
