Only 5 percent Real Property Gains Tax next year, says Ahmad Husni.

IPOH, Oct 24 (Bernama) -- The Real Property Gains Tax, effective Jan 1 next year, is only five per cent irrespective of the property disposal year, says Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah.

"The real Property Gains Tax for the first year is five per cent and is the same for the second, third, fourth and fifth year," he said in clarifying a news report in the business page of the Star Saturday.

He said the Real Property Gains Tax as announced by Prime Minister Datuk Seri Najib Tun Razak when tabling the 2010 Budget in Parliament yesterday provides exemption to the sale of a residential property for the first time and transfer of properties among family members like father to children.

The Star, in its BizWeek Section, reported that the Government proposed to re-impose the Real Property Gains Tax for monetary gains from property disposals.

The report said based on the Finance Bill, disposal within two years of acquisition will be taxed 30 per cent, 20 per cent in the third year and 15 per cent in the fourth year while disposal within five years and beyond will still be subjected to five per cent.

The latest measure has been described as "a knock-out punch" by Ronnie Lim, Deloitte Malaysia Country Tax consultant.

On no bonus for civil servants, Ahmad Husni said the country's financial deficit stemming from the global economic recession did not permit the Government to give bonus to civil servants.

He said the decision whether to give or not to give bonus to government employees must be viewed in the context of government financial constraints due to declining revenue.

"That's why the government gave RM500 special payment as we are aware there are civil servants who needed cash incentives from the government to tide over their living expenses.

"So, under the current circumstances even the RM500 is big enough," he said when responding to queries on the RM500 special payment to civil servants from Grade 41 to Grade 54 and to government retirees who went on compulsory retirement.

The special payment was announced by Najib, who is also Finance Minister, in his 2010 Budget yesterday. The payment will be made in December, incurring the Government RM400 million in additional expenditure.

Source at BERNAMA