30 August 2008
Among Pat Lah's proposals in his Budget speech themed "A Caring Government" were:
INCOME tax breaks
Highest marginal tax rate for individuals will be reduced from 28% to 27%, effective the year of assessment 2009. Marginal tax rate of 13% will also be reduced to 12%, which will benefit the middle income group.
Excise duty specific on cigarettes will be increased by three sen from 15 sen per stick to 18 sen per stick. With this, the duty for a 20-stick pack of cigarettes is now increased by 60 sen.
FOR the lower middle-income, and middle-income groups
Current tax rebate of RM350 per person will be increased to RM400 for those with taxable income of RM35,000 and below. Some 100,000 tax payers will thus be out of the tax net.
All interest income for individuals be tax exempt.
Reduce import duties on various consumer durables from between 10% and 60% to between 5% and 30%. These include blender, rice cooker, microwave oven and electric kettle. Also full import duty exemption on several food items, which now attract import duties of between 2% and 20%. These include vermicelli, biscuits, fruit juices and canned sweet corn.
Road tax on private passenger vehicles with diesel engines to be the same as those with petrol engines, effective Sept 1 2008.
Travel allowance for commuting to work provided by employers given full tax deduction, while employees receiving such an allowance be given tax exemption of up to RM2,400 per year.
Tax exemption to employees on the following staff benefits:
-- Interest subsidies on housing, motor vehicles and education loans. The tax exemption will be limited to total loans up to RM300,000;
-- Mobile phones, as well as telephone and internet bills paid by the employer;
-- Staff discounts of up to RM1,000 a year on company traded goods;
-- Staff discounts on services rendered by the company, such as private schools providing free education to children of their employees; and
-- Childcare allowance of up to RM2,400 per year.
Tax exemption to include expenses on maternity.
Tax exemption on acupuncture and ayurvedic treatment
For the purchase of medium cost houses of up to RM250,000, a 50% stamp duty exemption is given only on the instrument of transfer. To further reduce the cost of buying medium cost houses, the Government proposes the 50% stamp duty exemption be extended to loan agreements.
Government proposes the exemption of:
-- Import duty and sales tax on solar photovoltaic system equipment;
-- Import duty and sales tax on intermediate goods such as High Efficiency Motors and insulation materials;
-- Sales tax on locally manufactured solar heating system equipment;
-- Sales tax on locally manufactured energy efficient consumers goods such as refrigerators, air-conditioners, lightings, fans and televisions; and
-- 100% import duty and 50% excise duty on new hybrid CBU cars, with engine capacity below 2,000 cc, be given to franchise importers. This exemption is given for a period of two years to prepare for the local assembly of such cars.
HELPING hand for the poor:
Households which incur monthly electricity bills of RM20 or less will not have to pay for electricity, for the period from Oct 1 2008 to end of 2009. The Government will bear the cost of such bills, amounting to RM170 million for the period, benefitting 1.1 million households.
Government pensioners who had served at least 25 years upon retirement will receive a pension of not less than RM720 per month, effective Jan 1 2009. This increase benefit 75,000 retirees, including those receiving derivative pensions.
Eligibility criteria for welfare assistance will be raised -- from a monthly household income of RM400 to RM720 for Peninsular Malaysia, RM830 for Sarawak and RM960 for Sabah. This will double the number of eligible recipients from 54,000 households to 110,000.This includes an increase in the number of eligible senior citizens from 14,000 to 40,000. Allocation: an additional RM500 million
Government to set up a special fund of RM25 million to channel financial assistance to families deprived of their sources of income, particularly arising from accidents to breadwinners.
For caregivers in Rumah Tunas Harapan, the Government will increase their allowance from RM600 to RM1,000 per month, effective Sept 1 2008.
A monthly allowance of RM150 to be given to the disabled who cannot work. In addition, the monthly allowance for disabled students in special education schools, will also be increased from RM50 to RM150, while teaching assistants in these schools will be provided incentive payments of RM200 per month.
FOR civil servants
A bonus of one-month salary, subject to a minimum of RM1,000 for 2008. The bonus will be paid in two instalments, namely in September and December 2008.
The Government now provides a subsidy of RM180 per month towards TASKA fees for those with monthly household income of RM2,000. Effective Jan 1 2009, the eligibility criteria will be increased to RM3,000.
Civil servants are given free return airfares to their home states, between Peninsular Malaysia, and Sabah and Sarawak, once every two years. This facility will be provided every year, effective Jan 1 2009.
Government will improve the terms for staff housing loans, as follows:
-- Extend the tenure of new housing loans from 25 years to 30 years;
-- Provide housing loan facility for renovation works on houses not purchased through Government housing loan; and
-- Extend the housing loan insurance panel to all eligible insurance companies. At present, the panel is limited to five insurance companies.
Special incentive allowance for police personnel will be increased from RM100 to RM200 monthly, effective Jan 1 2009.
IMPROVING public transport
RapidPenang to get 200 more buses.Currently, it provides bus services on 33 routes in 106 housing areas with ridership of 46,000 passengers daily, constituting 60% of total bus services in Pulau Pinang. The new buses will bring the total to 350. Services will be extended to cover 14 new routes and ridership is estimated to increase to 120,000 passengers daily by end of 2009.
RM35 billion will be expended on public transportation from 2009 to 2014. This includes projects to enhance the capacity of existing rail services, build new rail tracks, increase the number of buses, and to provide better infrastructure facilities.
LRT system in Klang Valley will be extended by 30 km, that is 15 km respectively, for Kelana Jaya and Ampang lines. Upon completion in 2011, the extensions will benefit 2.6 million residents in Subang Jaya-USJ and Kinrara-Puchong areas, compared with 1.9 million currently. 35 train carriages for the Kelana Jaya Line have been procured costing RM1.3 billion and these trains will be fully operational by early 2010.
New LRT line will be built along a 42-km route from Kota Damansara to Cheras. This new line, with a capacity exceeding 300,000 passengers daily, will, upon completion in 2014, provide rail services to more than one million residents in the housing, industrial and financial areas in the vicinity.
Commuter rail services of Keretapi Tanah Melayu Berhad (KTMB) will be upgraded. A 7.5 km Sentul-Batu Caves line is under construction and is expected to be completed by 2010.
An integrated transport terminal is being built in Bandar Tasik Selatan. This can accommodate more than 130 taxis and 100 buses, complete with parking facilities and commercial lots, and will provide connectivity to the Ampang Line, ERL and KTM Commuter as well as urban taxis and buses in the Klang Valley. This terminal is expected to be operational in 2011.
To reduce public transport operators' operating costs, the Government will undertake the following measures:
-- provide a soft loan facility of RM3 billion under the Public Transportation Fund, administered by Bank Pembangunan Malaysia Berhad (BPMB), to finance the acquisition of buses and rail assets; and
-- reduce toll charges by 50% for all buses, except at border entry points, namely Johor Causeway, Second Link and Bukit Kayu Hitam, for a period of two years, effective Sept 15 2008. The Government will provide compensation to toll operators for their loss of revenue, estimated at RM45 million per year.
> Bus operators to get sales tax exemption on the purchase of locally assembled new buses and Accelerated Capital Allowance on the expenditure incurred.
> Road tax will be reduced to RM20 a year for all bus and taxi operators, including rent-a-car and limousine operators.
SUPPORTING Heritage sites
In July 2008, UNESCO listed Melaka and Georgetown as World Heritage Sites for the living culture, history, architecture and diversified culture. This reflects a global recognition of our rich and diversified cultural heritage. To support preservation initiatives, the Government will provide an allocation of RM50 million for conservation works of heritage sites in Melaka and Pulau Pinang, to support activities undertaken by non-governmental organisations (NGOs) and private sector.
HUMAN capital development
Proposal to extend the double deduction to employers for sponsoring their employees to pursue postgraduate studies in areas, such as in ICT, electronics and life sciences.
In addition, withholding tax exemption will be given to non-resident experts providing technical training services in these areas.
Double deduction to employers for sponsoring employees to pursue post-grad studies in areas like ICT, electronics, life sciences
Pat Lah's parting shot......
Pat Lah said the BN Government will continue to manage the economy responsibly.
"The Opposition, on the other hand, continues to make populist claims, which, if implemented, would undermine the Government’s financial position and bequeath a bankrupt nation to the next generation."
“I will not allow disturbances to continue. I will not permit the mandate given by the people to be seized” from the ruling party, he said. This, of course, got the opposition ranks in the Dewan Rakyat heckling him.
Meanwhile, Anwar commented that Pat Lah looked nervous when delivering the speech, saying that it was probably "because of the unrest in the people." Anwar, however, shot back at Abdullah's accusation of "opportunistic threats of seizing the people's mandate through undemocratic means".
"He still has the audacity to preach about democracy. Look at his media policy, corruption, judiciary. A no-confidence vote is a normal process and is the decision of the MPs," Anwar said.
The newly appointed opposition leader said when Abdullah talked of "mandates, he sounded like a dictator. What snatching? It is the will of the people and their representatives. He himself wanted to snatch Permatang Pauh."
Read here , here, here ,here and here.
source : the Sun & Malaysian Insider