OTHER ISSUES Incentives to Encourage the Return of Malaysian Experts Abroad Withdrawal of Levy on Profits Repatriated from Short-Term Portfolio Investmen Securitisation of Assets 1. Incentives to Encourage the Return of Malaysian Experts Abroad Currently, income remitted from abroad by individuals resident in Malaysia is subject to income tax. Personal effects except for motorcars imported by returning Malaysians who reside overseas are exempted from duties. Unskilled husbands who are non-citizens are not given permanent resident (PR) status. Non-citizen wives can only apply for PR status after residing in Malaysia for 5 years. To encourage Malaysian experts to return home, the following incentives are proposed :- a. income remitted within 2 years from the date of arrival will be exempted from income tax; b. 2 motorcars registered in the country of origin for at least 6 months in the name of either the husband/wife/children will be exempted from import duty and sales tax; and c. husband/wife and children of a Malaysian citizen will be given PR status within 6 months from the date of arrival. A Special Committee to be formed will identify those individuals with the required expertise. The proposal is to be effective from 1st January 2001. 2. Withdrawal of Levy on Profits Repatriated from Short-Term Portfolio Investment Presently, as a measure to discourage large outflows of short-term capital, profits repatriated from short-term portfolio investment are subject to a levy of 10% on the profits repatriated. In line with improvement in the capital market environment, it is proposed in the Budget Speech that the 10% levy on portfolio profits repatriated after one year be withdrawn. 3. Securitisation of Assets Currently, instruments executed on or after 30th October 1999 but not later than 31st December 2000 for the purpose of securitisation of assets as approved by the Securities Commission are exempted from stamp duty. Similarly, chargeable gains accruing on securitisation of chargeable assets are also exempted from real property gains tax if the gain accrues between 30th October 1999 until 31st December 2000. To strengthen the bond market, it is proposed that transactions relating to the issues of asset backed securities be exempted from stamp duty and real property gains tax. <top>