Budget 2024: Reactions from Securities Commission and Bursa Malaysia

Datuk Seri Awang Adek Hussin, chairman, Securities Commission

THE SC welcomes these measures and incentives announced today. These initiatives demonstrate the government’s commitment to fostering economic growth and encouraging sustainable and responsible investments in Malaysia.

We are also encouraged by measures to spur a more vibrant ecosystem to encourage entrepreneurship in Malaysia. The allocation of RM100 million to the Malaysia CoInvestment Fund’s (MyCIF) initiatives over the next three years and tax incentives for the equity crowdfunding (ECF) market will stimulate investment into promising startups and small businesses.

In balancing the need to broaden the tax base, as well as supporting the fundraising needs for corporations of all sizes, we are grateful that the government has considered targeted exemptions on Capital Gains Tax (CGT) impositions on activities relating to approved IPOs and Venture Capital. This would ensure continued fundraising activities in the capital market.

The extension of tax incentives on Sustainable and Responsible Investment (SRI) Sukuk and SRI Funds will encourage greater growth in these segments, and further strengthen the role of the capital market in facilitating businesses and investors to participate in sustainable financing and investment.

Tan Sri Abdul Wahid Omar, chairman of Bursa Malaysia

WE are glad the Prime Minister-cum-Minister of Finance remains committed to an expansionary budget (with a record RM393.8bil) but with fiscal responsibility by reducing fiscal deficit from 5.0% of GDP in 2023 to 4.3% in 2024 and further to 3.0% in the medium term in line with the Fiscal Responsibility Act (FRA).

This will be achieved, among others, by enhancing tax collection effectiveness, gradual subsidy rationalisation and plugging leakages as well as broadening the revenue base with increase in SST to 8%, reintroduction of tax on luxury goods of 5%-10% and imposition of 10% capital gains tax (CGT) on shares in unlisted companies.

The CGT will be effective 1 March 2024 with certain exemption for share disposals related to IPO activities, internal restructuring and venture capital companies. This will encourage more unlisted companies to list their shares on Bursa Malaysia thus spurring further growth in the capital market.

We are also encouraged by the government’s support for the development of voluntary carbon market with additional tax deduction of up to RM300,000 for Measurement, Reporting and Verification (MRV) expenses related to carbon credit project development which can be deducted from sales proceeds from carbon credits traded on Bursa Carbon Exchange (BCX).

The enhanced commitment towards Net Zero GHG emissions with RM2 billion National Energy Transition Facilitation Fund and numerous incentives for adoption of EVs are most welcome.

Similarly, for nature conservation initiatives including increasing the Ecological Fiscal Transfer for Biodiversity Conservation (EFT) to RM200 million, doubling the number of community rangers to 2,000 to curb illegal logging & mining and wildlife poaching, and pioneering the issuance of Biodiversity Sukuk of up to RM1bil must be lauded.