MALAYSIA: 2018 BUDGET SPEECH HIGHLIGHTS
The 2018 Budget, tabled in Parliament on 27 October 2017 by Prime Minister and Minister of Finance YAB Dato’ Sri Najib Tun Razak, entitled “Prospering an Inclusive Economy, Balancing Between Worldly and Hereafter, for the Wellbeing of Rakyat, Towards the TN50 Aspiration” is aimed towards more inclusive distribution of wealth amongst the Rakyat through strong economic growth and competitiveness.
A total of RM280.25 billion has been allocated under the 2018 Budget, an increase of 7.5% over the 2017 allocation of RM260.8 billion. Of this, RM234.25 billion is set aside for Operating Expenditure and RM46 billion for Development Expenditure. Despite increased spending in 2018, the fiscal deficit is expected to narrow to 2.8% of GDP in 2018 from the projected level of 3% in 2017. Government revenue collection in 2018 is expected to increase by 6.4% to RM239.86 billion as compared with that of 2017.
Efforts to stimulate the Malaysian economy include emphasis on high-impact investment, focusing on oil and gas, education, logistics, aerospace, rail, robotics and automation, and export-oriented industries.
Middle-income (M40) individuals will enjoy a reduction in their income tax liability as the tax rates on income bands from RM20,000 to RM70,000 will be reduced by two percentage points. To stimulate the rental of residential property, a 50% income tax exemption has been proposed for rental income (not exceeding RM2,000 per month) from residential homes received by Malaysian resident individuals for up to 3 years of assessment.
Under the 2050 National Transformation (TN50) project, all Malaysian babies born from 1 January 2018 until 2022 will be provided with an initial savings fund of RM200 in unit trust under PNB’s Unit Trust Scheme. To encourage women to return to the workforce, those who have been on a career break for at least 2 years will be given personal income tax exemption on employment income of up to 12 consecutive months.
GST reliefs, exemptions and zero rating have been proposed on services provided by local authorities, construction of schools and houses of worship and on magazines, comics, journals and periodicals respectively.
This modestly expansionary Budget is a positive step forward in view of the need to maintain fiscal discipline amid revenue challenges.
|Article Code :||VBS/BNews/31102017|