Budget 2010

BUDGET 2010

Theme: 1 Malaysia, Together We Prosper.

Total budget allocation: RM 191.5 billion

Operating expenditure: allocation RM 138.3 billion.

Development expenditure: allocation of RM 53.2 billion.

Three main strategies:
Driving the nation towards a high income economy,
Ensuring holistic and sustainable development and
Focusing on the well being of the rakyat


FOR THE GOVERMENT

Service tax
RM 50 service tax to be imposed on all credit cards and charge cards. As for supplementary RM 25 will be imposed.

Upstream petroleum companies
Income tax for the year of assessment 2010 based on income received in 2009 is to be paid by instalment over 5 years.

Approved Permits (AP)
The government will impose RM 10,000.00 for each AP to AP holders from Jan 2010. A portion of it will be channeled to the bumiputera development fund in the automotive sector.

Real property gains tax.
A fixed of 5% is imposed on the gains from the disposal of property.
Exemption up to RM 10,000.00 or 10% of the gains, whichever is higher, is given to individuals.
Existing involving gifts between parent n child, husband n wife, grandparents and grandchildren are retained.
Existing exemption involving disposal of a residential property once in a lifetime for an individual who is citizen or permanent resident is retained.


FOR THE MAN ON THE STREETS

Personal tax
Tax rate for chargeable income group exceeding RM100,000.000 to be reduced to 26%.
Personal relief to be increased from RM 8,000.00 to RM 9,000.00
Personal relief of RM6,000.00 on EPF and life insurance to RM7,000.00.
Tax relief on broadband subscription fees of up to RM500.00 per year.
Employment income of Malaysian and Foreign knowledge workers, in qualifying activities to be taxed at 15% indefinitely. Qualifying activities include green technology, biotechnology, educational services and healthcare services.

1Malaysia Sukuk
The government will issue a 1Malaysia sukuk totaling RM3billion to all Malaysians aged 21 and above with a minimum investment of RM 1,000.00 and maximum of RM50,000.00. The bonds will yield 5% to be paid quarterly and with tenure of three years.

Public Transport
To acquire 8 new electric multiple units (EMU’s) and increase frequency and efficiency of commuter
To fast tract the transport terminal in Gombak, will reduce congestion in the city centre.


Fuel Subsidy scheme
Will implement a fuel subsidy scheme next year which will utilize MyKad and benefit the target groups.

Civil servants and pensioners
Eligible to apply for computer loans up to maximum RM5,000.00 from the government once in 3 years.
Intan will be upgraded to a school of government with autonomy power.
Establishment of 1Malaysia retirement scheme for those without fixed incomes, such as farmers, taxi drivers to be administered by the EPF. Under the scheme the government will contribute 5% for every RM100 contribute to the retirement scheme, subject to a max of RM60 per annum. The government will only contribute for 5 years.
Special payment of RM 500 to be extended to all civil servants from Grade 41 to grade 54, as well as those on mandatory retirement.

Combating corruption
Formulate a whistle blower act that will be introduced in 2010 to encourage informers to disclose corruption and other misconduct.

Eradicating urban poverty
Ministry of Federal Territories and Urban Well being, and it’s responsibility includes the preparation of a comprehensive action plan and implementing suitable programmes.

Home ownership
The National Housing Department (JPN) will provide 74,000 low cost houses for rent in 2010.
EPF will launch a scheme to enable the public to combine the current n future savings in account 2 to obtain higher value or additional properties.

Knowledge-based economy
Companies participating in strategic knowledge-intensive activities will either be eligible for pioneer status with income tax exemption of 100% of statutory income within a period of 5 years or investment tax allowance of 60% on the qualifying capital expenditure incurred within a period of 5 years.
Expenditure incurred by a company for drafting the individual corporate knowledge-based master plan is allowed as tax deduction in the computation of income tax.


FOR CORPORATE/ BUSINESSES

Electricity
TNB will spend RM5 billion to implement electricity generation, transmission and distribution projects in 2010 to ensure smooth biz operation.
Sabah Electricity Sdn Bhd will also increase the electricity generation capacity as well as strengthen delivery system in Sabah.

Cooperative tax incentives
Tax rate for chargeable income group exceeding RM500,000 incurred bu cooperatives is reduced to 26%.

Stock market
Allow 100% foreign equity participation in corporate finance and financial planning companies.
Require all public listed companies to offer e-dividend to their shareholders in an effort to increase efficiency of the payment system.
Liberalize the commission-sharing agreement between stockbrokers and remises in a two- stage process to encourage retail participation. First stage is by allowing flexible sharing of commission at a min rate of 40% whilst the second stage is which will take effect on Jan 1 2010, the commission- sharing will be fully liberalized.


Small and medium enterprise (SMEs)
The government will consolidate 79 SME funds and grants managing RM8.8 billion to only 33 funds. The funds will be coordinated by SME Corp.
The government will allocate RM350 million to SME Corp, of which RM200 million is for SME soft loans, RM 100 million for capacity enhancement, and the balance for branding and promotion.

Export of financial services
Tax incentives to be given to banks