PETALING JAYA: Malaysian real estate investment trusts (M-REITs) are hoping for further relaxation of the withholding tax structure for investors in the upcoming budget in order to encourage more foreign interest in the sector.

Axis REIT Managers Bhd CEO and executive director Stewart Labrooy said there was a withholding tax of 10% for individuals while in Singapore there was not.

“Also, in Singapore, the corporate tax rate is lower than Malaysia and so dividends to non-resident corporate unitholders in Singapore attract a lower tax rate (17% versus 25%),” said Labrooy, who is also the chairman of the Malaysian REIT Managers Association.

According to a UOA REIT spokesperson, the abolishment of withholding taxes for foreign investors can ensure a level playing field with Singaporean REITs.

“As it is, foreign participation in M-REITs remains low.”

Sunway REIT Management Sdn Bhd chief executive officer Datuk Jeffrey Ng said he hoped there would be further relaxation of the withholding tax structure in the individual category, in order to encourage the participation of retail investors.