18 Things to know about Malaysia’s #Budget2018
Promises for the new year
1. Budget 2018 will see an increased allocation of RM280.25 billion as compared to Budget 2017's RM260.8 billion.
2. Individual income tax payers will see a 2% tax rate reduction for the tax bracket between RM20,001 and RM70,000. Specifically, it will see:
- 3% for RM20,001-RM35,000
- 8% for RM35,001-RM50,000
- 14% for RM50,001-RM70,000
3. Najib announced that 2018 is to be Women Empowerment Year with several new benefits. RM20 million will be allocated for training and entrepreneurship programmes tailored for women through the Entrepreneur Programme under the MyWin Academy.
4. Women entrepreneurs will be given an allocation of RM200 million as a soft loan to start their businesses.
5. Private sectors encouraged to increase their current 60 days of maternity leave to 90 days, as practised in the public sector.
6. Women who return to work after stopping for two years will receive a personal income tax exemption for the first year of their salary. However, it seems like it can only be claimed for the 2018 to 2020 period.
7. Adam50: Under this scheme, the government will allocate RM200 in savings for each child born between 2018 and 2022.
8. The abolition of the following tolls beginning 1 January 2018:
- Batu Tiga, Shah Alam
- Sungai Rasau, Selangor
- Bukit Kayu Hitam, Kedah
- Eastern Dispersal Link, Johor
9. Fun fact: World Tourism Organisation reported that Malaysia was the 12th most visited country in the world in 2016.
10. The high-speed KL-Singapore bullet train is expected to be completed by 2026.
11. Pulau Pangkor is to be made a tax-free island. However, alcohol, cigarettes and motor vehicles are not exempted. Meanwhile, an airport in Pulau Tioman is being considered and a new domestic airport will be built in Mukah. Penang International Airport and Langkawi International Airport will see upgrades. Kota Bharu and Sandakan airports will be renovated.
12. 2020 is to be Visit Malaysia year and an estimate of RM5 billion has been allocated to that.
13. Magazines, journals and comics will no longer be subjected to GST beginning 1 January 2018.
14. RM3.9 billion to be allocated for subsidies in essential goods including cooking gas, flour, cooking oil, electrical energy and toll.
15. RM1 billion to be allocated to initiatives covering Fit Malaysia, National Sports Day, athletes training, grassroots programme and national football development. In addition, 14 new sports complexes across the country will be established and RM20 million will be used to improve facilities at the Bukit Jalil National Sports School.
16. Under Budget 2018, the government will now allow employers to hire maids directly from nine selected countries without going through an agent. This means employers can also apply for foreign domestic helpers' visas online from the Immigration Department of Malaysia at the current levy and processing fees.
17. A grant of RM50 million will be provided to social enterprises and NGOs to help address and resolve daily social issues and challenges in the society.
18. The government plans to increase their initiatives to assist startups by allocating RM1 billion towards venture capital (VC) investments in selected sectors. For example, expanding the income tax exemption to include management and performance fees, as well as reducing the minimum investment limit in a venture company to 50% from 2018 to 2022 (it currently stands at 70%). Companies or individuals investing in VC companies will enjoy a tax deduction equalling to the amount of their investments. However, this is capped at a maximum of RM20 million per year.
You can read the full Budget 2018 speech here.