Service tax streamlining will create level playing field: Agents
24/09/2007 NST-PROP  By P. Rajan

Budget 2008's removal of the threshold above which professionals must levy service tax is good for the industry, say the country's estate agents.

"Now that all agents have to charge clients the five per cent tax, the playing field will be more level," said Malaysian Institute of Estate Agents (MIEA) president K. Soma Sundram.

Before its announcement, firms with billings of less than RM150,000 a year were exempt from charging the tax, which caused larger agencies to have to explain to their clients why they had to pay higher costs.

And if they refused to do so, which Soma said was 80 per cent of the time, the firms had to pay it from their earnings.

"Now that all agents must collect the tax, more sellers engaging professional services will be aware of their duty to pay," he said.

To ensure better collection, Soma said the government should come up with a mechanism to determine the onus of payment, which "should be on those who receive the services".

MIEA, representing the majority of the country's registered estate agents, is also confident the market will be more vibrant following the government's April 1 decision to waive Real Property Gains Tax and its liberalisation of Foreign Investment Committee requirements that used to allow foreigners to own just one property.

However, Soma said he hopes "there are no arbitrary changes" to these rulings as they could affect investor confidence.

Meanwhile, MIEA plans to organise the Malaysian Annual Real Estate Convention (Marec) from January 11 to 13 next year, focusing on the regionalisation of the property market, particularly on Vietnam and Laos.

"Vietnam is similar to what Kuala Lumpur was like 20 years ago and we want to highlight the potential it has," he said.

Among the speakers at the convention will be local and foreign experts from the United States and Australia, who will deliver presentations on critical industry issues, trends, key business drivers and the Iskandar Development Region.