Real-time video communication applications over Internet should be able to support such functionality as scalability because of the unpredictable and varying channel bandwidth between server and client. To accommodatethe wide variety of channel bitrates, a new scalable coding tool, namely the Fine Granular Scalability (FGS) coding tool has been reduce the adopted In the MPEG-4 video standard. This paper presentsa new FGS algorithm with matching Pursuit that can reduce the computational complexity of ordinal matching pursuit-based algorithm. The Proposed coding algorithm can make trade-off between Picture Quality and computationalcomplexity. Our simulation result shows that the proposed algorithm can reduce the computational cumplexity up to 1/5 compared to the conventional FGS method while retaining a similar picture quality.