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

“Perhaps, clarification is required when people are not sure how the mechanism is going to work.

“People will then tend to think that it is a difficult system. Therefore, my advice is, let us wait for the mechanism to be out,” he said.

He said it is important for businesses to wait for clear guidelines and legislation.

“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 merger and acquisition (M&A) deals, given the lack of understanding of how the mechanism works.

He hoped 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 added.

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

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