Budget 2019 was released by the new Pakatan Harapan government with the aim of reinstating Malaysia as the ‘Asian Tiger’. Now, this budget is close to 100 pages long and lists down all the initiatives and new taxes being tabled.
To make it easier, you can go through all the highlights you need to be aware of as a consumer below:
Let’s begin with everything you need to know about tax and how this budget changes things for you.
- The tax relief you get for Takaful premium or life insurance and EPF contribution will be separated.
- You will get an income tax relief of up to RM3,000 on all your Takaful or life insurance premium payments.
- You will get an income tax relief of up to RM4,000 on EPF contributions or any approved pension funds.
- Civil servants who are under the pension scheme will get a tax relief of up to RM7,000.
- The Skim Simpanan Pendidikan Nasional (SSPN) or National Education Savings Scheme tax relief has increased from RM6,000 to RM8,000.
- The government will introduce a new credit system for sales tax deduction from 1 January 2019. With this system in place, business costs will lower and you will avoid double taxation.
- A service tax will be imposed on online services like software, music, design, online ads, streaming services from 1 January 2019.
- The Government will be bringing in soda tax on two types of sugary drinks from 1 April 2019.
- You can voluntarily declare any unreported income through the Special Voluntary Disclosure Programme the Government plans to introduce.
The new initiatives under travel will make transportation more reasonable for Malaysians.
- If you use public transportation, you can buy RM100 monthly passes for RapidKL or buses that offer unlimited trips. This will begin from January 2019.
- You can also purchase a RM50 monthly pass if you only use RapidKL bus services. This scheme is expected to expand to other bus companies as well.
- You will get a RON95 petrol subsidy if you have a car with an engine capacity of 1,500cc and under or a motorcycle with an engine capacity of 125cc and under.
- The subsidy for petrol is RM0.30 per litre and is capped at 100 litres a month if you have a car and 40 litres a month if you have a bike.
- You will not enjoy this petrol subsidy if you own a luxury car with an engine capacity of 1,500cc and under.
- Starting January 2019, there will be no tolls for motorcycles on the First and Second Penang Bridge and the Second Link in Johor.
- The Government will also freeze all toll hikes on all city highways.
The Government plans to spend RM1.5 billion on affordable housing. Here’s how it affects you.
- The Real Estate and Housing Developers' Association Malaysia (Rehda) pledges to reduce house prices to 10%.
- The Central Bank of Malaysia (BNM) will be setting up a RM1 billion fund so those earning under RM2,300 each month can purchase houses priced at RM150,000 and below. This fund will be available through BSN, CIMB Bank, AmBank, RHB Bank, and Maybank with interest rates as low as 3.5%.
- The government will be directing RM1.5 billion to build affordable homes under the Civil Servants Housing Project, Syarikat Perumahan Nasional Bhd, People’s Housing Programme, and PR1MA.
- The government will be assigning RM25 million to create a mortgage guarantee, giving first-time home buyers with an income of below RM5,000 the opportunity to receive higher financing.
- The government is recommending an exemption on stamp duty for houses priced between RM300,001 and RM1 million on property transfer letters.
The Government will be allocating close to RM29 billion for health services. Below are the takeaways:
- The Government is joining forces with a private insurance company to introduce the B40 National Health Protection Fund.
- Under this fund, you will get protection of up to RM8,000 for 4 major critical illnesses. You will also get replacement income during your hospital treatment for a maximum of 14 days. This could be RM50 a day or RM700 a year.
- The Government will be dedicating RM20 million towards free mammograms for breast screening, pap smears, and HPV vaccinations in clinics and government hospitals. Also, RM50 million will go towards rare disease treatments and more, and to improve primary healthcare.
- A total of RM10 million will go towards setting up 50 childcare facilities in government buildings.
The Education Ministry has received an allocation of RM60.2 billion. Here’s how education will change:
- Payment deductions for PTPTN will be from 2% to 15% from your salary and this is based on your monthly income. However, you need to earn more than RM1,000 a month to be eligible under this system.
- Students from B40 households who get first class results will get loan deductions.
- An education aid of RM2.9 billion is proposed to help lower-income students in the form of textbooks, food supply, and cash aid.
- The ministry has assigned RM3.8 billion for scholarships, education loans, and more.
- Companies that help their staff clear their PTPTN loan will get a tax exemption by the end of 2019.
Now that the budget is out, it’s interesting to see how much of an impact it will have on the financial sector.