| A pragmatic Budget Posted: 25 Oct 2013 09:30 AM PDT The full 2014 Budget Speech by PM Najib Tun RazakCall it a pragmatic Budget, if you may. Besides injecting confidence on the GST, the rakyat's well-being gets continuous attention, especially with more affordable homes in the pipeline, a significant increase to BR1M and reduced personal tax. Prime Minister Najib Tun Razak, however, started his Budget speech before Parliament yesterday by anouncing that Malaysia will introduce the GST (Goods and Services Tax) from April 1, 2015 at a rate of 6 per cent. "With the implementation of GST, the Government will be able to address the weaknesses in the current taxation system. As an example, if we were to buy a carbonated drink in a restaurant today, we would not notice that we are paying double taxes, which are sales tax and service tax. "With the GST system, consumers will only need to pay tax once and the price of goods should be cheaper," he added. Najib, who said the 6 per cent GST was the lowest in the Asean region compared with 10 per cent in Indonesia, Vietnam, Cambodia, the Philippines and Laos, and 7 per cent in Singapore and Thailand, added that the Government would also provide a one-off payment of RM300 to BR1M households when GST was implemented. Announcing other tax reductions to offset the introduction of GST, Najib said families with a monthly income of RM4,000 will no longer have any tax liabilities, with individual income tax rates being reduced by one to three percentage points for all taxpayers to increase their disposable income. This, he added, meant that 300,000 taxpayers will no longer pay income tax. Najib said that certain essential items, however, would be exempted from GST - essential food items, transport services including toll payments, purchase and rental of residential properties and selected financial services. GST will also not be imposed on basic food items, piped water supply, the first 200 units of electricity per month for domestic consumers, services provided by the Government such as issuance of passports and licences, health services and school education. The second key point of Najib's Budget 2014 speech was the abolition of the 34 sen sugar subsidy effective Saturday, which he said was being done to curb the high diabetic rate among Malaysians under the age of 30. "Statistics indicate that 2.6 million Malaysians under the age of 30 are diabetic. If left untreated, patients will face various complications such as heart disease, kidney failure, blindness and amputation," said Najib.
With the removal of the subsidy, the price of sugar will rise from RM2.50 to RM2.84 per kg.
On BR1M, Najib said that RM450 cash aid would now be extended to households with a monthly income ranging between RM 3,000 and RM 4,000.
"The assistance is given to alleviate the rising cost of living borne by the lower middle-income group," said Najib.
He added that the BR1M payment for households with a monthly income of RM3,000 and below would be increased from RM500 to RM650 while single individuals aged 21 and above with an income not exceeding RM2,000 would see their BR1M payment increased from RM250 to RM300.
BR1M was first introduced in 2012, providing cash aid of RM500 to households with income of RM3,000 and below.
On housing, Najib said that real property gains tax (RPGT) would be increased to 30 per cent for properties disposed within the three-year holding period, whereas for disposals within the holding period up to four and five years, the rates are increased to 20 per cent and 15 per cent.
"For non-citizens, RPGT is imposed at 30 per cent on the gains from properties disposed within the holding period of up to five years and for disposals in the sixth and subsequent years, RPGT is imposed at 5 per cent," said Najib.
He added the minimum price of property that can be purchased by foreigners would be increased from RM500,000 to RM1,000,000 and that transparency in property sales prices would be increased. The 2014 Budget allocates a total of RM264.2 billion to implement programmes and projects for the well-being of the rakyat and national development. Of this amount, RM217.7 billion is for Operating Expenditure while RM46.5 billion for Development Expenditure. Some of the highlights include : - The domestic economy is projected to grow at a stronger pace of between 5.0 per cent to 5.5 per cent.
- The unemployment rate is estimated at 3.1 per cent while the inflation rate will remain low at between 2 per cent and 3 per cent.
- Goods exports are expected to grow 2.5 per cent due to improving external demand while on the supply side, the construction sector is expected to grow 9.6 per cent.
- The per capita income for 2014 is expected to reach RM34,126 compared with RM24,879 in 2009, an increase of 37 per cent over six years.
- It is even possible that Malaysia will achieve developed nation status much earlier than 2020.
- Agropolitan project and oil palm-based industries to be implemented in Sabah Development Corridor, Samalaju Industrial Park and Halal hub in Sarawak Regional Corridor.
- Services Sector Blueprint to be launched next year.
- Logistics Sector Master Plan and National Aviation Policy to be formulated.
- RM3 billion in soft loans under the Maritime Development Fund through Bank Pembangunan Malaysia.
- To replace existing air traffic control and management system in Subang, a new air traffic management centre costing RM700 million will be built at KLIA.
- Difference in minimum wages paid by employers for the period of Jan 1, 2014 to Dec 31, 2014 to be given further tax deduction.
- RM100 million to create Night Market Traders Entrepreneur Scheme under Bank Simpanan Nasional.
- Ministry of Health, Ministry of International Trade and Industry, and Ministry of Finance to undergo performance evaluation based on Outcome-Based Budgeting (OBB).
- To conduct audit on projects valued at more than RM100 million.
- Monthly Tax Deduction as Final Tax, effective from 2014 assessment year.
- Sales tax and service tax to be abolished, to be replaced by Goods and Services Tax (GST) effective April 1, 2015.
- GST rate is fixed at 6 per cent.
- GST will not be imposed on piped water and first 200 units of electricity per month for domestic consumers.
- Transportation services such as bus, train, LRT, taxi, ferry, boat, highway tolls as well as education and health services are exempted from GST.
- RM62 million for 'park and ride' facilities at LRT, KTM Komuter and ERL stations.
- RM15.3 million for Centralised Taxi Service System to ensure efficient mobilisation of taxi services.
- RM28 million for building 'last city terminals', upgrading of bus stops and providing 'drop-and-ride' facilities.
- RM28 million for refurbishing Electric Multiple Unit trains to ensure frequency and efficiency of services.
- Bumiputera equity holdings and property ownership to be increased through Skim Jejak Jaya Bumiputera, Skim Amanah Saham Bumiputera 2 and strengthening of Bumiputera real estate institutions.
- SME Bank to establish Bumiputera Equity Fund with an allocation of RM300 million to provide loans to credible Bumiputera companies to take over listed companies or companies with potential to be listed on Bursa Malaysia.
- RM200 million loan facility by SME Bank for development programmes for Malay Reserve Lands in strategic areas.
- Bumiputera Entrepreneurs Start-Up Scheme (SUPERB) to be set up with RM30 million initial fund.
- Expenses incurred by anchor companies, especially GLCs, to be given double tax deduction in order to enhance vendor development programmes.
 |
No comments:
Post a Comment