2013 Tax relief

Tax relief for children higher education increased from RM4k to RM6k beginning 2013 Tax relief for SSPN increased from RM3k to RM6k. Singles aged 21 and above earning  not more than RM2k also eligible for RM250. Allocation RM3 billion.

RM1000 grant to promote business via online

Women SME

Health

Medical screening

Socso allocate RM200 million

All socso members between age 40 and 55 (estimated 1.4 million ppl)

50% stamp duty exemption extended to end of 2014 and house price limit raised to RM400k Youths aged 30 and below SME bank fund RM50 million, loan up to RM100k Social – Senior citizens Service fees 50% reduction in passport fees starting 2013 Senior citizens Social – Children Service fees 50% reduction in passport fees starting 2013 Children age 12 and below

SME	financing	RM1 billion SME bank fund	Bumiputra SMEs
SME	financing	TEKUN loan with fund RM350 million, including RM50 for indian community	Bumiputra SMEs and Indian SMEs

SME

financing

PNB program to obtain loan up to RM25k for licensees and RM500k for licensors for franchising and licensed based business models

SMEs

SME	financing	RM1 billion SME bank fund	SME
SME	financing	RM200 million fund SME bank and IDB	Halal based SMEs

http://www.treasury.gov.my/data/anggaran/index.html

http://www.kpwkm.gov.my/nkra/definisi

Definitions

Abject Poverty: Household income below RM440

Poor: Household income below RM750

Low Income: Household income ranges from below RM1500, RM2000 or RM3000 depending on which agency defines it.

Middle Income: Household income between RM3001 and RM8000 (unverified)

References:

http://www.kpwkm.gov.my/nkra/definisi

2013 Prospects:

• Economy to grow between 4.5 and 5.5%
• Nominal GDP to exceed RM1 trillion.
• Construction sector to increase 11.2%
• Services sector to increase 5.6%
• Budget 2013 allocation 251.6 billion (201.9 billion (~80%) for operating expenses and 49.7 billion for development expenses).
• Development expenses includes 30 billion for economy (infrastructure, industry, agriculture and rural development), 11.1 billion for social (education, training, health, welfare, housing and community development), 4.6 billion for security, 2 billion for general administration and 2 billion for unexpected expenses.
• Deficit to reduce from 4.5% to 4%
• Foreign investment to be rm148.4 billion, from 75.3 billion in 2012 and 59.8 billion in 2011.

The summary below DOES NOT cover oil and gas, and capital/finance market areas.

Category	Item	Details	Beneficiaries
Agriculture	Oil palm, rubber, high value herbs and paddy	RM1.5 billion projects via NKEA EPP	Agriculture Industry
Social, Environment	River of life Sungai Klang upgrading	RM500 million cost	Klang Valley residents
Public	Water pipes and sewage replacement	RM 300 million cost	Public in selected areas.
Industry	To obtain technologies and acquisition of foreign companies	RM1 billion DIS fund	Large corporations
SME	financing	RM1 billion SME bank fund	SME
SME	financing	RM200 million fund SME bank and IDB	Halal based SMEs
SME	insurance	RM5k coverage under group insurance scheme for registered owners for small business (including hawkers). Govt to fund RM16 million	Small business owners
SME	financing	PNB program to obtain loan up to RM25k for licensees and RM500k for licensors for franchising and licensed based business models	SMEs
Tour Operators	Tax Exemption for 3 years	For those bringing in 750 foreign tourist or handle 1500 local tourists a year.	Tour operators
Agriculture	4 new Paddy granaries	RM140 million allocated	Farmers and agroentrepreneurs
Agriculture	Fishermen incentive, welfare and insurance	RM200 monthly allowance for 55k registered fishermen, insurance scheme and catch incentive programs to continue	fishermen
Agriculture	subsidies	RM2.4 billion for various subsidies and incentives to continue	Farmers and agropreneurs
Agriculture	insurance	Paddy takaful coverage scheme for 172k farmers having less than 10 ha fields. Each farmer can get RM13k. cost for govt is RM50 million
Social – Povery Eradication	financing	RM41 million to continue AzamTani project to help 6730 poor participants.	Poor families
SME	financing	RM1 billion SME bank fund	Bumiputra SMEs
SME	financing	TEKUN loan with fund RM350 million, including RM50 for indian community	Bumiputra SMEs and Indian SMEs
Education	training	RM500 million for enhancing teaching skills	Teachers
Education	construction	RM1 billion to maintain schools. RM400 million for national schools, RM100 million each to Tamil, Chinese, mission, religious, boarding and MRSM schools.	Schools
Education	Pre-school financing	RM10k grant to open ECCE centers	Pre-school SMEs
Education	taxation	Double deduction for allowance/subsidies provided for maintenance of centers and employees	Pre-school SMEs
Education	taxation	Income tax exemption for 5 years for center operators	Pre-school SMEs
Education	preschool	6 centers for children with special needs (down syndrome, autism, blind, hearing and speaking disabilities, physical disabilities and learning disabilities	Special needs children
Education	Skills training	RM440 million loan for trainees via PTPK taking MLVK programs	Youths, training centres
Education	Skills training	RM50 million to train indian students with poor results	Indian youths
Health	Medical screening	Socso allocate RM200 million	All socso members between age 40 and 55 (estimated 1.4 million ppl)
Green techonology	financing	Extend GTFS with 2 billion until 2015.	GT producing and using companies
Civil Service – pensioners	pension	Increase minimum amount from RM720 to RM820 effective 1/1/2013.	50,371 Govt pensioners
Social – Senior citizens	Service fees	50% reduction in passport fees starting 2013	Senior citizens
Social – Children	Service fees	50% reduction in passport fees starting 2013	Children age 12 and below
Military	income	Special allowance RM200 per month for all staff starting 2013, cost RM301 million	Military staff
Military	allowance	RM1000 special allowance	For armed forces members who don’t receive pension
Civil Service	housing	Fixed processing fee of RM100	Govt staff
Civil Service	bonus	1.5 months bonus. 0.5 paid before Raya, another 0.5 to be paid in December and balance 0.5 in January 2013.	Govt staff
Civil Service	allowance	Training allowance for selected categories	31,135 trainees to get higher allowance.
Public Safety	police	RM20 million for 1000 motorcycles and motor patrolling unit	Police, public
Public Safety	Local councils	496 units cctv for 25 local authorities	Local authorities
Social – Legal	funding	Legal aid fund RM20 million	Low income public
Social	security	RM10k grant for registered RA	Residents association
Social	security	RM39 million to finance rukun tetangga activities	Rukun tetangga
Public Safety	Uniform	RM90 million to provide 300k volunteers with uniform	RELA members
Public Safety	Security equipment ,taxation	100% deduction on security control equipments  in the same year, extended to housing developers	Housing developers
Rural development	roads	RM1.2 billion to develop 441km of roads	Rural folks
Rural development	Basic infrastructure	RM1.6 billion for Water supply (24k houses) and electricity (19k houses)	Rural folks
Rural development	Economic activities	29 villages and 38k villagers for food processing plants, jetties, marketing centers, tourism complexes, homestays etc	Rural folks
Health	1malaysia clinic	RM20 million to set up another 70 1malaysia clinics	public
Health	equipments	RM100 million to upgrade 350 clinics and buy 150 dialysis machines	Public, kidney disease patients
Economic	corporate	Train 500 women for director positions	Women
SME	business	RM1000 grant to promote business via online	Women SME
Health	Mammogram examination	RM25k allocation for free examination	100k women aged 40 and above.
Social – welfare	Financial assistance	RM1.2 billion in various programs	Senior citizens, children, disabled workers, chronic illness patients
Social – welfare	Income financing	RM400 million to continue 1azam programs	58,330 poor participants
SME	training	New Entrepreneur Foundation RM50 million fund for training and guidance	ICT youth entrepreneurs
SME	financing	SME bank fund RM50 million, loan up to RM100k	Youths aged 30 and below
Social – youths	financing	RM200 rebate to buy smartphones from selected telco. RM300 million allocated	1.5 million youths aged 21 to 30 and income below RM3k.
Transportation	discount	Discount 50% for ktm komuter users with income less than RM3k	Public (low income)
Social – Housing	House development	123k houses to be built. RM1.9 billion allocation.	Public with income between RM5k (individual) to RM10k (joint) per month for My First Home Scheme.  Low income families for PPR houses etc.
Social – Housing	financing	50% stamp duty exemption extended to end of 2014 and house price limit raised to RM400k	public
Social – Housing	sales	RPGT to be 15% (less than 2 years) and 10% (2-5 years). One exemption per lifetime.	public
Social – Welfare	allowance	BR1M RM500 extended to 2012.  For household income below RM3k. Singles aged 21 and above earning  not more than RM2k also eligible for RM250. Allocation RM3 billion.	4.3 million low income households and 2.7 million single unmarried individuals
Social – Health	Sugar subsidy reduced	Sugar subsidy reduced 20 sen effective 29/9/2012.	Public, consumer, F&B industries.
Economy – Tax	Tax reduction	Reduction of 1% for tax up to RM50k	Those with taxable income of up to RM50k, estimated more than 170k taxpayers won’t pay tax.
Transportation, Education	School bus	School bus operators get rM1000 rebate and 2% interest rate subsidy to buy new bus.	School bus operators
Transportation, Education	insurance	School children who travel in school bus with permits	School children
Education	Welfare assistance	Text book, meals, food supplement etc. costing RM2.6 billion	Low income family school children
Education	finance	One-off RM100 for every school children continued. RM540 million	540k school children
Higher education	finance	Book voucher increased to RM250 for IPT and pre-u students. RM325 million allocation	1.3 million pre-u and IPT students
Higher education	taxation	Tax relief for children higher education increased from RM4k to RM6k beginning 2013	public
Higher education	taxation	Tax relief for SSPN increased from RM3k to RM6k.	public
Higher education	financing	Discount 20% on full PTPTN settlement and 10% discount per annum for those with consistent repayment record, effective 1/10/2012	PTPTN loan recipients
ICT	Internet Centre	100 centers in next 3 years. RM150 million via SKMM	public

 In summary, the budget is able to cover certain industries, and also quite a large number of population.

• Plenty of goodies for youths and senior citizens.
• There’s no increase in tobacco or alcohol tax, which is surprising since there’s reduction on sugar subsidy on basis of health.
• The provision of rebate for smartphone is quite unusual, perhaps 1st in the world
• There’s not much in terms of increasing public transport other than expansion of RapidKL. Maybe the LRT and MRT projects are deemed sufficient. Perhaps could have covered taxi and more buses issues.
• No increase in health insurance coverage
• The rebate for broadband fees is not extended beyond 2012.
• Nothing offered on automobile segment, so looks like have to wait longer
• Big focus on agriculture, but not sure if it would be enough as capital and operational expenses are quite high.
• Police and military folks get plenty of good news.
• Chinese community may be wondering what’s in for them other than the allocation for schools.
• (Un)Surprising that RM1 billion offered for  bumiputra and another RM1 billion for all. A small amount of RM50 million for Indian community.
• Middle income families would be getting some tax relief (especially if have children in college/uni), but nothing specific or direct in other areas.
• the focus on SME is maintained, as a possible avenue for low and middle income folks to pursue.
• its a pleasant surprise that income tax is reduced for up to RM50,000 taxable income. I personally thought there won’t be any reduction. However this may mean 2014 will see implementation of GST.
• RPGT is increased to 15% if sell property in 2 years, but it may not deter when profit is as much as 30% for some properties.
• Security concerns are being addressed, and hopefully the new intake for PDRM will see a more balanced racial population.
• in terms of short term benefits, the budget is well presented. In terms of long term benefits, its a challenge and impact will be known after few years.