A people and commerce friendly balanced budget before the coming general election
The Budget 2018 was announced by the Prime Minister cum Finance Minister Datuk Seri Najib Razak on 27 October 2018. This year’s budget is “people and commerce friendly” as well anticipated, as this is the final budget before the forthcoming general election.
“To prosper with inclusive economy, balancing duniawi (worldly) and ukhrawi (other-worldly) excellence to better the lives of the rakyat(people) towards TN50 aspirations”
Note: [‘Tranformasi Nasional 2050’(National Transformation 2050) or TN50 is an initiative by the Government to plan for the future of Malaysia in the period 2020 to 2050. From the vision of becoming a developed nation, we should strive to be amongst the top countries in the world in economic development, citizen well-being and innovation.]
i) To enhance investment, trade and industry.
ii) Towards in achieving TN50 aspirations.
iii) Excellence in Education Development, Training, Skills and Talent
iv) Driving inclusive development
v) Prioritising well-being of rakyat (people) and income-making opportunities
vi) Preparing for the fourth Industrial Revolution and the Digital Economy;
vii) Enhancing efficiency and delivery of government-linked companies (GLC) and public service.
viii) Balancing between the par excellence of the worldly and the hereafter.
3. Personal income tax:
i) 12-month income tax exemption for women returning to workforce (after a minimum 2-year break).
ii) Personal income tax cut with 2% cut in the RM20,000 to RM70,000 tax income bands; savings between RM300 to RM1,000 for 2.3 million tax payers.
iii) Tax exemption on 50% of home rental income up to RM2,000 per month to Malaysians residing in Malaysia – Years of assessment: 2018 to 2020
iv) Resident individual income tax relief of up to RM6,000 for net savings in the SSPN is extended for another 3 years w.e.f. year of assessment 2018 to 2020.
4. Corporate income tax:
i) Capital allowances on ICT equipment and software to be eligible for 100% claims between 2018 and 2020.
ii) Principal regional hub tax incentive extended to 31.12. 2020.
iii) Earning Stripping Rules is implemented to replace Thin Capitalisation Rules w.e.f. 1 January 2019.
iv) Further deduction is given to employers hiring workers affected by accidents/critical illnesses certified by the Medical Board of the Social Security Organisation (SOCSO) that they are able to work within their capabilities w.e.f. year of assessment 2018.
i) Listing Pulau Pangkor as a tax free island, except for alcohol, cigarettes, motor vehicles.
ii) Special tourism healthcare incentive increase to 100%.
iii) Tax incentives for new four- and five-star hotel investments extended until 31.12. 2020.
iv) Companies registered with the Malaysia Healthcare Travel council (MHTC) that provide dental and ambulatory healthcare services is given double deduction for expenses incurred in obtaining certification for quality systems and standards w.e.f. year of assessment 2018.
i) The minimum investment in venture companies will be reduced to 50 percent from 70 percent.
ii) Tax incentives will be expanded to include management and performance fees received by the venture capital
management companies 2018-2022.
iii) Extended the income tax exemption incentive equivalent to the amount of investment made by “Angel investor” in venture companies to 31.12.2010.
iv) Up to RM20million provided as tax deduction for Companies or individuals investing in venture capital companies
7. Stamp Duty:
Exemption of stamp duty on contract note for transaction of Exchange Traded Fund and Structured warrant over three years from Jan 2018 onwards
i) Pulau Pangkor is a tax free island, except for alcoholic beverages, tobacco and motor vehicles
ii) Services by local authorities will not subject to GST from 1.4.2018 onwards
iii) Reading materials such as magazine and comics are classified as zero-rated from 1.1.2018
iv) Cruise operators are given relief for handling services by port operators
v) Construction of school buildings, house of worship, funded through donation is given relief if the contract is signed after 1.4.2017.
vi) Import of oil and gas equipments under lease, supplied to customers in designated areas are given relief from 1.1.2018.
vii) Imports of big tickets such as aircraft, oil rigs and floating structures are given relief from 1.1.2018.
viii) The management and maintenance services of JMB and housing developers are not subject to GST.
9. Funding initiatives for SMEs:
i) RM1bn is provided by major institutional investors for investment in venture capital in main selected sectors, coordinated by Securities Commission (SC).
ii) RM7bn: Skim Jaminan Pembiayaan Perniagaan (SJPP) to fund SMEs
iii) RM1bn: Shariah-compliant SME Financing Scheme, increasing the fund size to RM2.5 billion
iv) RM200mn: SME Corp for training programmes, grants and soft loans
v) RM82mn: Development of halal industries and products under various agencies.
vi) RM150mn: MATRADE, MIDA and SME Corp for export-related
vii) RM1bn: EXIM Bank for insurance coverage credit facilities
viii) RM200mn: credit financing facilities to SME exporters
ix) RM100mn: with 70% guaranteed by Government to automate of local furniture for exports
x) RM6.5bn: Assist farmers, fisherman, smallholders and rubber tappers
xi) RM555mn: Bumiputera entrepreneurship enhancement programme
xii) RM300mn: equity investment under Pelaburan Hartanah Berhad (PHB) and Ekuiti Nasional Berhad (EKUINAS)
xiii) RM50mn: SME loans by KOJADI
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