Withholding Tax Withdrawal Has Minimal Impact On KLCCP Stapled Group

KUALA LUMPUR, April 28 (Bernama) -- The withdrawal of the 10 per cent withholding tax by the Malaysian government has minimal impact towards KLCCP Stapled Group due to its shareholder mix.

KLCCP Stapled Group consists of KLCC Property Holdings Bhd and KLCC Real Estate Investment Trust (KLCC REIT).

Its chief financial officer, Ahmad Hakimi Muhammad Radzi said compared with some REIT peers, the KLCCP Stapled Group is somewhat insulated, although he recognises that the change has broader implications for the Malaysian REIT industry as a whole.

“If you compare the Malaysian REIT industry to markets such as Singapore, there is an impact on how competitive we are.

“In terms of our engagement with the government, the challenge is how we can remain competitive without relying too much on this incentive. That is what we are working on together with other REIT players,” he said.

Meanwhile, KLCCP Stapled Group chief executive officer Datuk Mohd Salem Kailany said the REIT industry remained a resilient asset class known for delivering stable dividend income.

“(Despite the withholding tax removal) REIT dividend payout will still continue to be stable.

“From an investor’s perspective, REIT is still the preferred instrument for investment as it offers stable dividends and less volatility,” he added.

On March 19, it was reported that the Malaysian government had discontinued preferential withholding tax rates on dividends from REITs and property trust funds (PTFs).

According to Practice Note 2/2026 issued by the Inland Revenue Board, the previous concessionary 10 per cent rate for most non-corporate investors has been removed, effective this year.

Instead, Malaysians will be taxed based on prevailing individual income tax rates, with no withholding tax deducted at source.

-- BERNAMA