Tax Budget 2013 MalaysiaBudget 2013: Driving Transformation Towards A Developed Nation

Budget 2013 Malaysia was tabled by Prime Minister Datuk Seri Najib Razak in Parliament on 28 September 2012 from 4:00pm to 6:00pm. and this budget is considered people and business friendly, based on the fact that this year will be high likely the Election Year!

Budget 2013 Highlights

Bantuan Rakyat 1Malaysia (BR1M2.0)

RM500 (instead of RM250, correction after much clarification in the news) assistance money for a household earning less than RM3,000.

This is the 2nd cash assistance be given since its first last year. The criteria remains the same per last year’s. Existing BR1M recipients are not required to register for the 2nd time. RM500 will be paid effective Jan 2013. New applicant may register commencing Nov 2012 online or IRB offices, State Development Offices and District Offices.

In addition, RM250 BR1M assistance money is extended for single unmarried individuals aged 21 and above with monthly income not more than RM2,000. MoF clarified that students aged 21 and above is not entitled to this RM250 assistance money.


Personal tax and tax relief

Individual income tax rate to be reduced by 1 percentage point for the first RM50,000 of chargeable income.

Child tax relief to be increased from RM4,000 to RM6,000 per child (6x of basic child relief of RM1,000) for children aged 18 and above and receiving receiving full-time tertiary education, effective from year of assessment 2013.

Tax relief of RM3,000 for savings in the National Education Savings Scheme (SSPN) will be increased to RM6,000 for YA 2012 – YA 2017.

Comment: It appears that public awareness of such SSPN scheme is still very low. Apart from entitlement to tax relief, how does the scheme work and how one could subsequently utilise or withdraw the savings is not entirely clear. In order to provide more information about this tax relief for children education savings, Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN) has published a FAQ relating to SSPN on tax relief for children education savings. Click here to view the FAQ.


Real Property Gain Tax (RPGT)

RPGT will be increased to 15% for disposal of property within 2 years, 10% for disposal within 2 to 5 years, effective from 1 Jan 2013. After 5 years, it is not subject to RPGT. Currently, 10% RPGT for disposal within 2 years, 5% within 5 years, 0% after 5 years.


RM200 rebate for 3G smartphone purchase

RM200 one-off rebate for purchase of one unit 3G smartphone from authorised dealers, for youths aged between 21 to 30 years with monthly income of RM3,000 or below.


Other goodies

Book voucher of RM250 for students.

Passport fees for senior citizens and children aged 12 and below be reduced by 50% from RM300 to RM150 (5 years) and RM100 to RM80 (2 years). Effective from January 2013. [Comment: Age threshold for senior citizens is not made known yet. Could it be citizen aged 55 and above?]

All Malaysians with a monthly income of RM3,000 and below and who travel by KTM Komuter, will get 50% fare discount. Currently, only the disabled, retirees and students enjoy a 50% fare discount.

Reduce sugar subsidy by 20 sen per kg from 29 Sept 2012.


PTPTN loan discount

Repayment of full loan from 1 October 2012 until 30 September 2013, a discount of 20% will be given on their PTPTN education loans.

Update: Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN) has issued a FAQ relating to 20% discount on the PTPTN education loans. Click here for view the FAQ.

For those consistent repayment of PTPTN loan in accordance to their repayment schedule, a 10% discount per annum on their repayment will be given effective from 1 Oct 2012.

Update: PTPTN’s FAQ relating to 10% discount on repayment made on PTPTN education loans. Click here for view the FAQ.


My First Home Scheme and 50% stamp duty exemption

My First Home Scheme income limit for individual loans raised from RM3,000 to RM5,000 per month, or in the case of joint loans of husband and wife of up to RM10,000 per month.

50% stamp duty exemption on sale and purchase agreements and loan agreements for purchase of the first residential property of up to RM400,000 (increased from RM350,000), be extended to 31 Dec 2014.

For more information about My First Home Scheme, see our post on My First Home Scheme – Skim Rumah Pertamaku.


1.5x month bonus for public servants

Bonus of 1.5x month for public servants for year 2012. Half month paid during 2012 Hari Raya, remaining one month will be paid in end Dec 2012 (50%) and in Jan 2013 (50%).


Tax incentives for pre-schools

Launching grant of RM10,000 to assist operators of Early Childhood Care and Education (ECCE) private centres in opening new high quality pre-schools.

A double deduction on the allowance or subsidies provided to the employees and expenses for the maintenance of childcare centres be given to the employers.

Income tax exemption for 5 years and industrial building allowance at the rate of 10% a year be given to operators of pre-school and private childcare centres.

Income tax exemption for 5 years and industrial building allowance at the rate of 10% a year be given to operators of private pre-schools.


Tax status of a Limited Liability Partnership

Partnership established under Limited Liability Partnerships Act, 2012 will have the similar tax status to that of a company under Companies Act, 1965. Tax status of a LLP is different from a conventional partnership. Click here for more details and our comment.


Download:

Budget 2013 Speech (in English)

Budget 2013 Speech (in Bahasa Malaysia)

Finance (No. 2) Bill 2012 (Proposed amendments to tax laws)

Economic Report 2012/2013


Pre-Budget 2013 

The following are all the important Pre-Budget 2013 Tax News & Updates presented in the timeline manner for your easier reading. Please click on the title of each News for more details.

Budget 2013: More Funds Needed, Says Airasia

(20 September 2012)

In line with the government’s aim of transforming Malaysia into a tourism hub in the Asean region, budget carrier AirAsia Bhd feels that the government should allocate more funds to the Department of Civil Aviation Malaysia (DCA Malaysia) in the upcoming Budget 2013.

Chief executive officer of AirAsia, Aireen Omar, said more funds for DCA Malaysia would boost the department’s capabilities in handling Malaysia’s growing air traffic


Budget 2013: Good News For New Home Buyers? 

(12 September 2012)

Housing and Local Government Minister Datuk Seri Chor Chee Heung said Datuk Seri Najib Razak was equally concerned about providing affordable homes for the people in the country.

Affordable homes are units priced between RM120,000 to RM300,000.


Budget 2013: More Initiatives To Spur Digital Services 

(10 September 2012)

The government needs to take more initiatives in Budget 2013 to spur digital services, saidCelcom Axiata Bhd CEO Datuk Seri Shazalli Ramly.

Shazalli said they could be in the form of tax incentives, rebates or any other areas to allow consumers to participate in the digital era.


Budget 2013: Special Allocation For Education Ministry 

(9 September 2012)

Deputy Prime Minister and Education Minister Tan Sri Muhyiddin Yassin said the Education Ministry hopes to get a special allocation under Budget 2013 to implement the National Education Policy Review Blueprint.

He said the special allocation was necessary to effect a major shift in education.


Budget 2013: People And Business Friendly Budget 

(5 September 2012)

The draft copy of the 2013 Budget was tabled at the cabinet meeting on Wednesday (5 September), said Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah.

“Malaysia Budget 2013 will be a balanced budget — people and business-friendly — our revenue and expenditure must be balanced,” he said, ”The budget parameters are already in place and the cabinet will study and fine-tune them.”


Dr Mahathir: Budget 2013 To Benefit All Malaysians 

(5 September 2012)

The 2013 Budget is expected to be a very good and productive financial plan for the benefit of Malaysians, given that it is the last budget before the country faces the 13th general elections, Tun Dr Mahathir Mohamad said.

The former prime minister said the budget should not only be packaged with exciting goodies for the rakyat but must also carry a value on its own.


Second RM500 BR1M in Budget 2013? 

(1 September 2012)

The government will announce a second round of RM500 cash (BR1M) handouts to underprivileged households under Malaysia Budget 2013, in a move that is expected to boost the ratings of Prime Minister Datuk Seri Najib Razak and his Barisan Nasional (BN) coalition ahead of the general election expected to be called early next year.

“The second BR1M will be paid out as part of the Tax Budget 2013,” a government source told The Malaysian Insider.


Malaysia Budget 2013: An Election Budget 

(30 August 2012)

The upcoming Malaysia Budget 2013 announcement will likely be an election budget with sweeteners such as pay rises for civil servants, said an economist.

“The Malaysia Budget 2013 will be announced in September and I suspect the election will be called soon after”, Economist Corporate Network (ECN) Chief Economist for South and South-East Asia Justin Wood said at a briefing hosted by Philip Morris (M) Sdn Bhd yesterday.


More Policies To Control House Prices And Reduce Speculation 

(29 August 2012)

Tax Budget 2013 will see more measures to control the soaring prices of property, including tighter fiscal policies to curb speculation.

Housing and Local Government Minister Datuk Seri Chor Chee Heung said most Malaysians felt today’s property prices were “far too high” and wanted the Government to see to this.


Economic Growth the focus of Malaysia Budget 2013 

(28 August 2012)

Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop says Tax Budget 2013 will focus on the people’s prosperity and the country’s economic growth to face the short- and long-term economic challenge besides maintaining the existing fiscal policy.

“For economic growth, we focus on the quality and quantity of the growth with the aim of maintaining a high growth rate and so that the benefits can be enjoyed by all the people.”


Government to reduce debts while helping rakyat

(17 August 2012)

The government will focus efforts on reducing the country’s debt apart from helping the rakyat as well as boost the economy in formulating Malaysia Budget 2013.

Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said the country’s debt currently stands at 53 per cent of gross domestic product.


Bursa to rise on Malaysia Budget 2013

(15 August 2012)

The FBM KLCI (Bursa Malaysia) is expected to trend higher due to rising foreign fund flow, improved global sentiment and Malaysia Budget 2013 rotation play, according to Affin Investment Bank.

In a retail research note Tuesday, Affin said despite the Hari Raya holiday mood, it expects “FBM KLCI to trend higher towards 1650 level riding on improved global sentiment, rising foreign buying and Tax Budget 2013 rotation play”.


Lower taxes, affordable homes, cheaper food & better public transport

(7 August 2012)

The Finance Ministry received 84 memoranda from various groups, NGOs and individuals on proposals for the upcoming Malaysia Budget 2013 as it started off its first of 18 focus group meetings last week.

Deputy Finance Minister Datuk Donald Lim Siang Chai said among the popular requests was for lower individual and corporate tax, which he said would be considered.


More benefits are expected by the People

(7 August 2012)

Universiti Sains Malaysia’s School of Social Science deputy dean, Dr Sivamurugan Pandian, said “The tax budget 2013 needs to explore initiatives, especially for those  below the poverty line as they would be hit hardest by any potential crisis,” he told the New Straits Times yesterday.

He said the previous budget initiatives such as the 1Malaysia People’s Aid (BR1M RM500 Cash) and Kedai Rakyat 1Malaysia (KR1M) should be continued, besides introducing more benefits for single parents and the needy.


Prime Minister invites ideas & inputs for Tax Budget 2013

(16 July 2012)

Prime Minister Datuk Seri Najib Razak has invited Malaysians to participate in the Malaysia Budget 2013 discussions by contributing ideas and sharing their suggestions and views online from Monday to July 29.

The public can submit their opinions by clicking on the appropriate place on the latest posting on Najib’s blog, www.1malaysia.com.my.


Malaysia Budget 2013  will be tabled on 28 September 2012

(16 July 2012)

Prime Minister Datuk Seri Najib Razak said the budget would focus on quality and balanced growth as well as the people’s well-being.

“I am here to listen to your views and recommendations on issues confronting us. As part of the tax budget 2013 consultation, we have received 84 memorandums.”