This post was written by Chua Sue-Ann and was originally published on edGY.my
Prime Minister Datuk Seri Najib Razak just tabled Budget 2016 in parliament. There’s slightly more BR1M payments, some tax relief, more taxes for the rich and more infrastructure spending and government-led affordable housing. But if you were hoping for some relief from the middle class squeeze, the bad news is there’s nothing much for you.
A bit more relief from Goods and Services Tax (GST)
Zero-rating on all controlled medicine under the Poisons List Groups A, B, C and D and for an additional 95 brands of over the counter medication brands covering drugs for 30 types of disease such as cancer, diabetes, hypertension and cardiovascular disease. This doubles the zero-rated medication from 4,215 to 8,630.
Zero-rate on the following food items: infant and children’s milk that is soy- and organic-based, dhal, chickpeas, peas, lotus root, water chestnut, mustard seeds, jaggery sugar and dried mee kolok.
Government realises that many mobile phone users, especially the youth, rely on prepaid cards. Malaysians will get rebates on the GST amount paid that will be credited directly back to their account effective Jan 1, 2016 to Dec 31, 2016.
Due to lower revenue from oil, GST revenue makes up for the shortfall. If GST was not implemented, national revenue wold have foregone RM21 billion. SST collects only RM18 billion because GST collection about RM39 billion and deficit will go up to 4.6% and not 3.2%
More taxes for the rich
To enhance tax structure, the maximum tax rate for high income earners is increased from 25% to 26% for those earning between RM600,000 and RM1 million in annual income. Those who earn more than RM1 million will be taxed at 28%, a higher rate compared with the earlier rate of 25%.
Some tax relief
Tax relief for each child below 18 years of age is increased from RM1,000 to RM2,000 from YA2016.
Tax relief for individual taxpayer whose spouse has no income is increased from RM3,000 to RM4,000.
Individual taxpayers are given tax relief up to RM5,000 per year for medical treatment and care of parents who are ill. For the first time, tax relief for children who provide for their parents is given total tax relief of RM1,500 for the mother and RM1,500 for the father. This is provided each parent does not have income exceeding RM2,000 a month and are age 60 and above.
Tax relief increased from RM6,000 to RM8,000 for each child above the age of 18 years who is studying at local or foreign institutions of higher learning from YA2016.
Tax relief increased from RM6,000 to RM8,000 for disabled child above the age of 18 years who is studying at local or foreign institutions of higher learning, from YA2016.
Existing tax relief for parents with a disabled child is RM6,000. This means that if the disabled child continues his or her education in local or foreign institutions, the total relief allowable is RM14,000.
Minimum wage is increased from RM900 to RM1,000 a month for Peninsular Malaysia and from RM800 to RM920 for Sabah, Sarawak and the Federal Territory of Labuan. This is effective July 1, 2016 and excludes workers in domestic services.
BR1M payments to increase a little bit in 2016
BR1M assistance allocated RM5.9 billion and is expected to benefit 4.7 million household and 2.7 million single individuals.
New category: RM 1,050 for those in e-Kasih database with monthly income of below RM1,000
RM1,000 (from RM950) for households with monthly income of RM3,000 and below
RM800 (from RM750) for households with monthly income of between RM3,001 and RM4,000
RM400 (from RM350) for single individuals aged 21 and above with monthly income not exceeding RM2,000
Bereavement Scheme of RM1,000 will be continued
Things for the youth
Scholarships programmes continue to receive funds:
– RM1.65 billion via Public Service Department
– RM288 million via Ministry of Education
– RM250 million via Ministry of Higher Education
– RM258 million via Ministry of Health
RM280 million for technical and vocational training at the Institut Kemahiran Belia Negara and Institut Kemahiran Tinggi Belia Negara
RM50 million for programmes to develop youth capacity in economic activity and entrepreneurship
More affordable housing measures
PR1MA to get RM1.6 billion in allocation to build 175,000 residential units that will be sold 20% below market price. About 10,000 units is expected to be completed in 2016.
Syarikat Perumahan Negara Bhd to get RM200 million to build build 10,000 units of Rumah Mesra Rakyat with each unit getting a RM20,000 subsidy
100,000 units of housing to be built for civil servants under the Perumahan Penjawat Awam 1Malaysia (PPA1M) by 2018. It will be priced between RM90,000 to RM300,000 a unit.
Housing Ministry to build 22,300 units of flats and 9,800 units of terrace houses under the Programme Perumahan Rakyat for RM863 million
RM200 million will go towards Skim Pembiayaan Deposit Rumah Pertama for first-time home buyers of affordable property to have access to deposit payments.
PR1MA and PPA1M to build 5,000 residential units in 10 locations near LRT and monorail stations and corridors including in Pandan Jaya, Sentul and Titiwangsa.
GLCs to build affordable houses: EPF-owned Kwasa Land to build 800 units of affordable housing near the MRT station in the Kwasa Damansara area and Sime Darby Property to build 4,600 units
More infrastructure spending
Infrastructure and logistics upgrade include: Damansara – Shah Alam Highway, Sungai Besi – Ulu Klang Expressway, Pulau Indah Expressway and Central Spine Road. RM900 million is allocated for traffic dispersal project in Jalan Tun Razak.
Government to study a coastal road frm Masjid Tanah, Klebang to Jambatan Syed Abdul Aziz in Melaka.
RM42 million towards the construction of an airport in Mukah, Sarawak, upgrading airports in Kuantan and Kota Baru as well as runway expansion for the airport in Batu Berendam, Melaka.
MCMC will be given RM1.2 billion for measures such as to improve rural broadband speed four-fold to 20MBps from 5 MBps, National Fiber Backbone Infrastructure, high speed broadband and undersea cable systems.
Public transport update
Public transport is being developed in urban centres. The 18.1km LRT Ampang line will be ready by March 2016 and the 17.4 km LRT Kelana Jaya line to Putra Heights will be ready in md-2016. Both these extensions are worth RM10 billion.
The 51km MRT 1 from Sungai Buloh to Semantan will be ready in Dec 2016 and the second part from Semantan to Kajang will be ready by mid-2017. MRT 2 line from Sungai Buloh to Serdang to Putrajaya to be ready by 2022 and is expected to benefit two million people. Construction is expected to begin in the second quarter of 2016 and ready by 2022. MRT 3 line from Bandar Utama, Damansara to Johan Setia, Klang that will benefit two million people will be built in 2016 and ready by 2020.
Malaysia to continue negotiations on high speed rail with Singapore government.
Bus Rapid Transit (BRT) KL-Klang and BRT Kota Kinabalu will be implemented.
Key numbers and facts from Budget 2016
This is the first of five budgets of the 11th Malaysia Plan.
Theme: Prospering the Rakyat
5 main thrusts:
- First Priority: Strengthening Economic Resilience;
- Second Priority: Increasing Productivity, Innovation and Green Technology;
- Third Priority: Empowering Human Capital;
- Fourth Priority: Advancing Bumiputera Agenda; and
- Fifth Priority: Easing the Cost of Living of the Rakyat.
The 2016 Budget allocates a total of RM267.2 billion, an increase of RM6.5 billion compared with the 2015 initial allocation of RM260.7 billion. Of the amount, RM215.2 billion is for Operating Expenditure while RM52 billion for is Development Expenditure.
Under Operating Expenditure, RM70.5 billion is for Emoluments and RM36.3 billion for Supplies and Services. The largest share of RM106.6 billion is for Fixed Charges and Grants, while RM761 million is for Purchase of Assets. The remaining RM1 billion is for Other Expenditures.
Under Development Expenditure, the economic sector will receive the highest share at RM30.1 billion, followed by the social sector with RM13.1 billion for education and training, health, housing and the well-being of society. In addition, RM5.2 billion is allocated to the security sector. The balance of RM1.6 billion is for general administration and RM2 billion for contingencies.
In 2016, the Federal Government revenue collection is estimated at RM225.7 billion, an increase of RM3.2 billion from 2015.
Fiscal deficit expected at 3.1% of GDP in 2016.
GDP growth 4.5% – 5.5% this year higher than global average of 3.1%. There is no comparison whatsoever during 1998 Asian Financial Crisis -7.4% growth.
GDP growth estimated at 4% to 5% in 2016 driven by 6.7% growth in investments and 6.4% growth in private consumption.
Fiscal deficit down from to 3.2% in 2016 from 6.7% in 2009.
Poverty rate down to 0.6% in 2014 from 3.8% in 2009 and hardcore poverty rate almost zero.
Inflation rate is controlled at 2% to 3%.
International reserves still high at RM418 billion as at Oct 15, 2015 and can cover 8.8 months of delayed imports and 1.2 times short-term external debt.
Unemployment rate has reduced to 2.9% with 1.8 million jobs created.
Read More:
"ExpatGo welcomes and encourages comments, input, and divergent opinions. However, we kindly request that you use suitable language in your comments, and refrain from any sort of personal attack, hate speech, or disparaging rhetoric. Comments not in line with this are subject to removal from the site. "
Lousy
value for money