This article first appeared in The Edge Malaysia Weekly on November 5, 2018 - November 11, 2018
RAISING tax revenue
• Services Tax imposed on imported services (beginning January 2019) and imported online services (beginning January 2020)
• Special Voluntary Disclosure Programme for undeclared income, with penalties of between 10% and 15% for disclosures before June 30, 2019. Penalties after that date are between 80% and 300%
• Tax exemption on income from unit trusts to end in January 2019
• Petrol subsidies to end as pump prices will be refloated based on prevailing market prices
• Soda tax imposed (beginning April 2019) at 40 sen/litre for drinks with sugar content exceeding 5g/100ml and juices with sugar content exceeding 12g/100ml
Aviation
• New levy on international departures (RM20 for Asean; RM40 for the rest) beginning June 2019
Property
• Real Property Gains Tax raised (a) from 0% to 5% for disposals in sixth year onwards for citizens and permanent residents; (b) from 5% to 10% for companies, non-citizens and non-permanent residents
• Stamp duty on property transactions worth over RM1 million raised from 3% to 4%
Sin tax
• Casino licence fee raised from RM120 million to RM150 million per year
• Casino duty raised to 35% of gross collection
• Dealer machine licence fee raised from RM10,000 to RM50,000 per year
• Duty on gambling machines raised from 20% to 30% on gross collection
Social well-being
• RM5 billion for targeted Bantuan Sara Hidup for 4.1 million households
• Tiered Bantuan Sara Hidup beginning January 2019 — RM1,000 for households earning less than RM2,000, RM750 for those earning RM2,001 to RM3,000 and RM500 for those earning RM3,001 to RM4,000
• Additional Bantuan Sara Hidup of RM120 for each child below 18 years of age, up to four children per household. No age limit for disabled child/children
• RM150 million to stabilise and equalise prices of basic necessities such as flour, sugar, cooking oil (1kg packets), especially in Sabah and Sarawak
• RM80 million to subsidise electricity charges for households with bills of RM40 or less, benefiting 185,000 accounts. (Current subsidy: RM20 monthly or less)
Transport
• RM2 billion for targeted petrol subsidies aimed at four million car owners and 2.6 million motorcycle owners
• RM240 million to introduce unlimited-ride monthly pass (RM100 for RapidKL rail and bus systems; RM50 for RapidKL buses)
• RM20 million from Kuala Lumpur City Hall to expand GoKL bus services
• Toll rate increases for next year frozen; government to bear RM700 million cost
• RM20 million to abolish motorcycle toll at Johor’s Second Link and both Penang bridges.
Social enterprise
• RM10 million to assist non-governmental organisations and social enterprises that help marginal communities such as the disabled
• Income tax exemption on donations to social enterprises (10% of aggregate company income or 7% of aggregate individual income)
Education
• RM2.9 billion for food, textbooks and cash aid for students from low-income families
• RM652 million for school upgrades
• Tax exemption on donations to upgrade infrastructure at national schools and public institutions of higher learning
• RM100 million for reconstruction of dilapidated schools via public-private partnerships
• RM206 million for development and training programmes in polytechnics and community colleges
• RM30 million contestable fund for training institutions to run competitive programmes aimed at job placements for graduates
• RM20 million to raise youth competency via TVET-sponsored boot camps
• RM400 million contestable research fund for institutions of higher learning
• RM30 million via matching grants under the Malaysia Partnerships and Alliances in Research programme.
• RM3.8 billion scholarships and lending via various ministries and agencies (of which RM2 billion goes to Majlis Amanah Rakyat)
• RM17.5 million over five years to Malaysia Professional Accountancy Centre to produce 600 bumiputera accountants
PTPTN
• Progressive repayment schedule of between 2% and 15% for borrowers earning more than RM1,000
• Tax relief for companies that help pay off the remaining loans of their employees for the year ending 2019
• Individual tax relief for additional savings deposited in the PTPTN National Education Savings Scheme from RM6,000 to RM8,000
• Discounts for first-class honours graduates from B40 households
• Debt write-off for borrowers over 60 with less than RM4,000 monthly income (benefiting up to 350 debtors, costing RM4.2 million)
Civil service
• One-off RM500 assistance to pensioners receiving less than RM1,000 monthly
• RM10 million to provide healthcare benefits to 30,000 “contract of service” officers
• Mortgage tenure under the Public Sector Housing Financing Board extended to 35 years (first-time financing) and 30 years (second-time financing)
Workforce
• Public-listed companies to disclose key pay metrics in annual reports, including average wage per worker, lowest wage paid and highest-lowest wage ratio
Employees Provident Fund
• RM45 million for matching RM40 monthly EPF contribution for housewives under i-Suri (husbands contributing at least RM5 monthly)
• Combined tax relief for EPF contribution, life insurance/takaful to be separated into RM4,000 for EPF and RM3,000 for life insurance/takaful.
• Mandatory EPF contribution by employers reduced from 6% to 4% beginning January 2019 for employees aged over 60
Employment
• Employers hiring workers over 60 to get additional tax deduction up to RM4,000 monthly salary to promote employment of elderly, especially among B40
• Additional tax deduction for companies employing ex-convicts up to a monthly salary of RM4,000 each
• RM20 million matching grant for apprenticeship and graduate enhancement programmes to boost employability of 4,000 youths
• RM10 million to set up 50 childcare facilities in government buildings to ease burden on working mothers
• Levies for foreigners who have worked in agriculture/plantation industries for more than 10 years reduced to RM3,500 from RM10,000
Healthcare
• New B40 Health Protection Fund to provide insurance cover for top four critical illnesses up to RM8,000 and up to 14 days of hospitalisation income cover (at RM50 a day or RM700 per annum) beginning January 2019.
• RM100 million for a nationwide health screening programme for 800,000 individuals aged over 50 in B40 households
• RM20 million for free mammogram screening, HPV vaccination programme and pap smear tests for 70,000 women
• RM50 million for treating rare diseases, hepatitis C cases and stunted growth among children, providing more haemodialysis treatments and enhancing primary healthcare.
Affordable housing
• RM1.5 billion for the development of affordable homes
• RM1 billion fund to help first-time homebuyers (monthly income of less than RM2,300) buy homes costing less than RM150,000
• Stamp duty exemption on the first RM300,000 for first-time homebuyers for homes costing up to RM500,000 (until December 2020)
• Mortgage guarantee for first-time homebuyers with household monthly income of up to RM5,000, with an allocation of RM25 million by Cagamas Bhd
• Stamp duty exemption on the purchase of first house costing between RM300,001 and RM1 million for six months starting Jan 1, 2019
• Rehda has agreed to reduce house prices by 10% for non-price-controlled units
• Property crowdfunding alternative for first-time homebuyers
Businesses
• RM210 million (2019 to 2021) to support transition to Industry 4.0. Malaysian Productivity Corporation to help first 500 SMEs to undertake readiness assessment for such migration
• RM2 million, 250 facilities and 1,200 pieces of scientific equipment to be made available for the private sector to enhance collaboration. Government to place at least 100 researchers with the private sector with cost borne by government
• RM2 billion under the Business Loan Guarantee Scheme to support SMEs investing in automation, with guarantees up to 70%
• RM3 billion for the Industry Digitalisation Transformation Fund at subsidised 2% interest rate to support adoption of smart technology
• Double tax deduction for engineering/technology-related scholarships and expenses for training programmes approved by the Ministry of Human Resources or Malaysian Investment Development Authority
Entrepreneurism
• Funding from government-linked venture capital funds to be disbursed on a matching basis, based on the recipient company’s ability to secure private-sector funding
• RM2 billion set aside by government-linked investment funds to co-invest on a matching basis with private equity and venture capital funds in strategic sectors and new growth areas
• RM50 million Co-investment Fund to invest alongside the private sector via alternative financing platforms (for example, equity crowdfunding and peer-to-peer financing)
• Double tax deduction extended for three years beginning 2019 for additional expenses incurred in issuing Ijarah/Wakalah sukuk or issuing retail bonds
• RM1 billion for the National Fibre Connectivity Plan, aiming for 30Mbps internet speed in rural and remote areas within five years
SMEs
• RM4.5 billion SME Loan Fund with a 60% guarantee from Skim Jaminan Pembiayaan Perniagaan, including RM1 billion for bumiputera SMEs
• Corporate income tax rate for taxable income of up to RM500,000 and SMEs with paid-up capital of less than RM2.5 million reduced from 18% to 17%
• RM2 billion worth of credit and takaful facility for SME exports via EXIM Bank
• RM1 billion SME Syariah-compliant Financing Scheme made available via Islamic financial institutions where the government will provide a subsidy of 2% profit rate
Tourism
• RM100 million in matching grants for the private sector to support promotional and marketing campaigns overseas
• 50% of tourism tax proceeds (about RM50 million) to be shared with the respective state governments.
• RM20 million for the Malaysia Healthcare Tourism Council with target set at growing the medical tourism industry 25% annually
Commodities
• RM30 million to help oil palm smallholders get Malaysian Sustainable Palm Oil certification.
• RM100 million to support the building of rubberised roads in ports and industrial areas in stages, to boost the use of local rubber
• RM50 million to continue the Rubber Production Incentive to cushion the impact of the rubber price declining below RM2.20 per kg for smallholders
• RM117 million to support the agricultural sector via research so as to boost productivity and automation adoption, implement the agrofood industry and train youth in entrepreneurship
Rural infrastructure
• RM926 million to build and upgrade roads and bridges
• RM694 million and RM738 million to supply electricity and water respectively to rural and remote regions
• RM85 million to new villages to upgrade and maintain basic infrastructure
• RM100 million to help Indian youth improve their employment prospects
• RM100 million for Orang Asli communities via the construction and upgrading of infrastructure (water supply, education, relocation and economic development)
• RM20 million to residents’ associations registered with the Registrar of Societies to carry out community, security and neighbourhood activities
• RM295 million for FELDA (51% increase y-o-y) to upgrade roads and implement water and other infrastructural projects
• RM5.009 billion for the Sabah government’s development expenditure while Sarawak gets RM4.346 billion
Logistics
• RM2.46 billion for the upgrading and restoration of railway tracks
• 380 acres in Pulau Indah to be converted into a free-trade zone to boost shipping/logistic activities in Port Klang. This will be developed solely by the private sector or via a public-private joint venture
Environment
• RM60 million to support state projects that protect and expand existing natural resources
• RM5 million in micro-grants to manage and protect Orang Asli and Orang Asal communities in collaboration with the United Nations Development Programme
• Pioneer status (70%) or investment allowance (60%) for five years for companies producing environment-friendly plastics
• RM2 billion Green Technology Financing Scheme with a 2% subsidised interest rate for the first five years
• RM1 billion Sustainable Development Financing Fund with a 2% subsidised interest rate
Youth and sport
• RM70 million Patriot programme for youth aged 15 to 30
• RM100 million to prepare our athletes for the Tokyo Olympics 2020
Islamic affairs
• RM1.2 billion for Islamic activities
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