April 30, 2020 @ 5:07pm MYT

The current Covid-19 pandemic has put tremendous financial pressures not only on the low income but also the middle income families. Loss of jobs, reduced incomes and fear of an uncertain future are some of the immediate and long terms fears and concerns of households.

The Malaysian Institute of Economic Research has estimated a loss of more than 2.4 million jobs as a consequence of this pandemic. Clearly the financial support by government to assist consumers to survive these difficult times is extremely limited.

Firstly, many self-employed and daily wage workers are excluded. Secondly, the one-off aid received is clearly insufficient to meet personal and household basic needs and consumers have to find their own means to raise cash to meet their basic obligations.

There can be expected to be many fall-out from these economic consequences, including disposal of one's assets to generate cash for the family. Some families might even have to sell their homes. It would be tragic but may be unavoidable to survive and ensure sustenance for the family.

As the government is unable to provide financially for the families with an adequate support system; at the very best it should not profit from them.

Families forced to sell their homes have to pay real property gains tax (RPGT) ranging from 30 per cent for properties sold within the first year to 5 per cent for sale of properties after 5 years.

This would be a tremendous burden to families. The 5 per cent RPGT for properties sold after 5 years was introduced by the previous government. It should be abolished.

Further, it is also proposed that for properties being sold beyond 3 years, the tax rate is further lowered to assist households being forced to sell their properties to face the current crises.

It should also be noted that the current economic scenario including property prices are really negative. It would be great if the family could even sell their property above the purchase price of their homes.

Fomca suggests that the households be allowed to keep whatever gains they make to help the family survive in these challenging times.

In summary, RPGT for sale of houses beyond 5 years should be abolished, while sale of property beyond 3 years should be reduced.

This would in some way help families raise some cash to meet their basic and essential needs.

DATUK DR MARIMUTHU NADASON

PRESIDENT, FOMCA

*The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times

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