Malaysian Prime Minister Najib Razak tabled the 2015 Budget on Friday, promising people-centric policies and a stronger economy.
Here’s a look at what the Budget has in store for the average Malaysian on five important issues:
1. Income Tax
As many as 300,000 individual taxpayers will no longer have tax liability as the Budget allocates a reduction in individual income tax rates by 1 to 3 percentage points. This means taxpayers with family and income of RM4,000 (S$1,563) per month will also be exempt.
Chargeable income limit for maximum tax rate will also be raised from RM100,000 to RM400,000, while maximum rate itself would be reduced from 26 per cent to 24-25 per cent, saving the taxpayer at least 5.3 per cent in taxes.
2. Housing Policy
The Budget has good news for young married couples between 25 and 40 years of age wanting to buy their first home. A Youth Housing Scheme will fund loans of up to 35 years duration for these couples to buy their dream house as long as their household income does not exceed RM10,000, and as long as the property price does not exceed RM500,000.
It also ensures monthly financial assistance of RM200 to borrowers for first two years, 50 per cent exemption of stamp duty, and 10 per cent loan guarantee. However, the scheme is open to only the first 20,000 units.
3. Fuel Subsidies
The government decided to exempt petrol, diesel and Liquefied Petroleum Gas from Goods and Services Tax, but circumvented the issue of reducing fuel subsidies for now. The prime minister announced the government’s plans to develop a new mechanism for providing petroleum subsidies which at present runs into a bill of RM21 billion a year.
The new mechanism will be announced soon.
4. Goods and Services Tax
Malaysia will exempt retail fuels like petrol, diesel and LPG, key food items like fruits, bread, noodles and coffee powder, and medicine from the nation’s new consumption tax to come into affect from next April.
It will also increase handouts to lower-income households to help them cope with the tax that’s aimed at helping the government narrow its Budget deficit. Prices of as many as 532 items of the 944 goods in taxable basket is expected to reduce by up to 4.1 per cent.
5. Women’s empowerment
The government plans to allocate RM2.26 billion to the Ministry of Women, Family and Community Development to implement plans to enhance the contribution of women in national development. Under this plan, 125 potential women directors will be trained in 2015 to fill positions as members of the board of state or private sector companies.
Housewives will be trained in special skills and extended incentives to return to the job market with improved opportunities through the 1Malaysia Support for Housewife programme.
Source: The Star/Asia News Network, The Rakyat Post, Bloomberg