Page 70 - SC SCAR 2023 ENGLISH Flipbook

PART 3 STRENGTHENING THE SUSTAINABILITY AND COMPETITIVENESS OF THE CAPITAL MARKET
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SECURITIES COMMISSION MALAYSIA ANNUAL REPORT 2023
Enabling a conducive tax environment to encourage greater investor participation in the ECF market
As part of efforts to encourage greater investments into ECF by individuals, the government had announced in Budget 2021 that individual investors be given an income tax exemption, subject to the following:
• Investment must be made through ECF platforms from 2021 to 2023;
• Exempted amount is equivalent to 50% of investments made, capped at RM50,000 for each year of assessment (YA);
• Exempted amount is limited to 10% of aggregate income for each YA;
• Investment is not allowed to be disposed of within two years from the date of investment; and
• The investor, investee company and amount of investment must be verified by the SC.
To provide greater clarity in respect of the income tax exemption requirements and to facilitate applications by eligible ECF investors for the tax exemption, the SC revised the Guidelines of Recognized Markets (RMO Guidelines) on 19 April 2023. It sets out the requirements which must be fulfilled by the individual ECF investor for purposes of applying for the ECF tax exemption, as specified in the Income Tax (Exemption) (No. 4) Order 2022.
The revised guidelines will enhance ECF investors’ understanding of the requirements relating to application of the tax exemption, while ensuring the attractiveness of the ECF industry.
Shoring up confidence in alternative financing market via Malaysia Co-investment Fund
MyCIF, a Malaysian government initiative established as part of the 2019 Budget, has fostered the growth and inclusiveness of alternative financing via ECF and P2P financing.
“It seeks to serve as an efficient and transparent means to channel government funds to the intended recipients while catalysing financing access for MSMEs. It also aims to crowd in private investments into these platforms.” said Datuk Johan Mahmood Merican, Secretary General of Treasury and Steering Committee Member of MyCIF.
With aggregate disbursement of RM250 million since its inception, the initiative has co-invested a total of RM930 million across 54,695 ECF and P2P financing campaigns as of December 2023, complemented by private investors contribution amounting to RM3.82 billion since the establishment of MyCIF.
In 2023, MyCIF expanded its special initiative towards promoting sustainability development agenda by extending the 1:2 special co-investment ratio to selected ESG segments alongside the existing initiative for agriculture sector, recognising the pivotal role in local economic growth.
MyCIF’s public-private co-investment model is the first of its kind in the region. This underscores the government’s commitment in shaping better financing access for MSMEs.