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Saturday, October 26, 2013

Malaysia Budget 2014

This is the first time I posted Malaysia Budget in my blog, reason being I felt that it's relevant to my life, comparing to earlier time. Maybe I'm more mature and started to relate myself to the country development and change in policy, I don't know. But I read through everything and it's important for me to know. Somehow, newspaper fail to share with me what's the actual implementation, and I search online and got this data. Sharing here for your reference as well.
 
I've highlighted some pointers important for middle income group like me, hope it's helpful.
 
 
CIVIL SERVICE
* Pensioners will receive a special financial assistance of 250 ringgit to assist them meet the rising cost of living.
* Government to give a half-month bonus for 2013 with a minimum payment of RM500 to be paid in early January 2014.
 
CASH HANDOUTS
* Cash handouts to households with a monthly income of below 3,000 ringgit will be increased to 650 ringgit from 500 ringgit.
* For individuals aged 21 and above and with a monthly income not exceeding 2,000 ringgit, cash handouts will be increased to 300 ringgit from 250 ringgit.
* For the first time, cash assistance of 450 ringgit will be extended to households with a monthly income of between 3,000-4,000 ringgit. Rising cost of living borne by the lower middle-income group.
* To implement all cash schemes, government will allocate 4.6 billion ringgit which is expected to benefit 7.9 million recipients.
     
REAL PROPERTY GAINS TAX
* For gains on properties disposed within the holding period of up to 3 years, RPGT rate is increased to 30 percent.
* For disposals within the holding period up to 4 and 5 years, the rates are increased to 20 percent and 15 percent, respectively. Malaysian property firms with exposure to this tax change include UEM Sunrise,  Mah Sing Group and Tropicana Corp .
* Raise the minimum price of property that can be purchased by foreigners to 1 million ringgit from 500,000 ringgit.
* Prohibit developers from implementing projects that have features of Developer Interest Bearing Scheme (DIBS), to prevent developers from incorporating interest rates on loans in house prices during the construction period.
* Financial institutions are prohibited from providing final funding for projects involved in the DIBS scheme. Malaysia's top three banks are Maybank, CIMB and Public Bank.
   
AFFORDABLE HOMES
* To further increase access to home ownership at affordable prices, an estimated 223,000 units of new houses will be built by the government and the private sector in 2014.
* Companies that specialise in affordable housing development include Hua Yang Bhd. 
* Government to allocate 578 million ringgit to the National Housing Department (JPN) for low cost flats consisting of 16,473 housing units.
* Malaysian's government to provide 80,000 housing units with an allocation of 1 billion ringgit under affordable housing scheme. The sales price of the houses will be 20 percent lower than market prices.
* Introduce the Private Affordable Ownership Housing Scheme (MyHome) to encourage the private sector to build more low and medium-cost houses. The scheme provides a subsidy of 30,000 ringgit to the private developers for each unit built.
* Preference will be given to developers who build low and medium-cost houses in areas with high demand and limited to 10,000 units in 2014.
* The scheme is for housing projects approved effective from 1 January 2014 with an allocation of 300 million ringgit.
   
TAX RELIEF
* Government proposes a special tax relief of 2,000 ringgit be given to tax payers with a monthly income up to 8,000 ringgit received in 2013.
      
GOODS AND SALES TAX
* To implement goods and services tax (GST) on April 1, 2015 -17 months from now.
* GST rate fixed at six percent, the lowest among ASEAN countries.
* GST replaces current sales tax.
* Basic food items, transportation services, highway tolls, water and first 200 units of electricity for domestic users per month to be exempt from GST.
* Sale, purchase and rental of residential properties as well as selected financial services are exempted from GST.
* PM Najib: "The reality is that inflation now is low at around 2 percent. The government is confident this will be the best time to impose GST as inflation is minimal and under control."
* Training grant of 100 million ringgit will be provided to businesses that send their employees for GST training in 2013 and 2014.
* Financial assistance amounting to 150 million ringgit will be provided to small and medium enterprises for the purchase of accounting software in 2014 and 2015.
   
CORPORATE TAX
* Corporate income tax rate be reduced by 1 percentage from 25 percent to 24 percent.
* Income tax rate for small and medium companies will be reduced by 1 percentage point from 20 percent to 19 percent from the year of assessment 2016.
         
INCOME TAX
* Government to give one-off cash assistance of 300 ringgit to low income households
* Personal income tax rates be reduced by 1 to 3 percentage points for all tax payers.  
* Individual income tax structure will be reviewed 
* Chargeable income subject to the maximum rate will be increased from exceeding 100,000 ringgit to exceeding 400,000 ringgit.
* Current maximum tax rate at 26 percent to be reduced to 24 percent
* Measures to be effective in 2015       

SUBSIDIES
* Subsidy programme to be "gradually restructured"
* A portion of savings from restructuring to be distributed in the form of direct cash assistance with the other half to finance development projects.
* To abolish the sugar subsidy of 34 sen effective October 26 2013.
 
IMPROVING BUDGET MANAGEMENT
* committed to reducing the fiscal deficit gradually, with the aim of achieving a balanced budget by 2020.
* To ensure federal debt level will remain low and not exceed 55 percent of GDP.
* Government to conduct audits on projects valued at more than 100 million ringgit during its implementation.
 
ISLAMIC FINANCE
* Securities Commission to introduce the a framework for Social Responsible Investment (SRI) Sukuk, or Islamic bonds, to finance "sustainable and responsible" investment initiatives.
   
AGRICULTURE
* Government to allocate six billion ringgit allocated for agriculture programmes.         
* Says to 243 million ringgit allocated for rubber, palm oil and cocoa replanting as well as forest plantation programmes. Main plantation companies in Malaysia include Sime Darby, IOI Corp and KL Kepong.
 
LOGISTICS
* Government to allocate 3 billion ringgit in soft loans under the Maritime Development Fund through Bank Pembangunan Malaysia.
* The fund is to provide financing to encourage the development of the shipping industry, shipyard construction, oil and gas as well as maritime-related support activities.
       
AVIATION
* To replace existing air traffic control and management system in Subang, a new air traffic management centre costing 700 million ringgit will be built at Kuala Lumpur International Airport (KLIA).
* Kota Kinabalu, Sandakan, Miri, Sibu and Mukah airports in Sabah and Sarawak to be upgraded with 312 million ringgit allocation. 
* Malaysia Airports manages and operates all airports across the country except for one in Johor.
 
PUBLIC INVESTMENTS           
* Public investments to reach 106 billion ringgit. Projects to be implemented include:
* A 316-kilometre West Coast Expressway. Locally listed Kumpulan Europlus Bhd owns 80 percent of the project, while IJM Corp owns the balance 20 percent.
* Double-tracking rail project along west coast Malaysia. The project is carried out by as a joint venture between MMC Corp  and Gamuda.
* Various projects from state oil firm Petronas under its 300 billion ringgit capex programme, including a Petrochemicals plant in southern Johor state.
 
INTERNET ACCESS
* To carry out second phase of high-speed broadband project with the private sector involving 1.8 billion ringgit investment. State-linked telco Telekom Malaysia Bhd is involved in the project.
*To increase Internet coverage in rural areas, 1,000 telecommunication transmission towers will be built in the next three years, with an investment of 1.5 billion ringgit.
*To increase Internet access in Sabah and Sarawak, new underwater cables will be laid within three years at a cost of 850 million ringgit.