Budget 2014: Najib announces 6% GST effective April 1, 2015

Najib announces 6% GST effective April 1, 2015

Prime Minister Datuk Seri Najib Razak today announced the introduction of the Goods and Services Tax, and proposed the abolition of the sales and services tax. He said the new tax will be effective on April 1, 2015.

The announcement comes as anti-GST activists converged outside the parliament (pic, right).
Najib is currently presenting a RM264.4 billion budget for 2014. He estimated that the fiscal deficit will be at 3.5% with revenue expected at RM224 billion.
Among the highlights of his speech are:

  • The domestic economy is projected to grow at a stronger pace of between 5.0% to 5.5%.
  • The unemployment rate is estimated at 3.1% while the inflation rate will remain low at between 2% and 3%.
  • Goods exports are expected to grow 2.5% due to improving external demand while on the supply side, the construction sector is expected to  grow 9.6%.
  • The per capita income for 2014 is expected to reach RM34,126 compared with RM24,879 in 2009, an increase of 37% over six years.
  •  Najib presenting his budget at the parliament today. - The Malaysian Insider pic, October 25, 2013.It is possible that Malaysia will achieve developed nation status much earlier than 2020.
  • RM 217.7 billion is for operating expenditure while RM46.5 billion for development expenditure.
  • RM63.6 billion allocated for emoluments and RM36.6 billion for supplies and services.
  • RM29 billion allocated to the economic sector.
  • RM10.5 billion allocated to the social sector for education, training, health, welfare, housing and community development.
  • RM3.9 billion allocated to the security sector, RM1.1 billion for general administration, RM2 billion for contingencies.
  • In 2014, Federal Government revenue collection is estimated at RM224.1 billion, up RM4 billion from 2013.
  • Federal Government fiscal deficit expected to further decline from 4% of GDP in 2013 to 3.5% in 2014.
  • RM1.2 billion allocated for operating and development expenditure in 2013 and 2014 to implement Visit Malaysia Year 2014 programmes, targeting 28 million tourists.
  • 2015 announced as the Year of Festivals.
  • To promote the tourism, RM2 billion will be provided to the Special Tourism Infrastructure Fund under Bank Pembangunan, to finance cost of building hotels, resorts and theme parks and purchase & replacement of equipment related to the tourism.
  • No more tax filing for individual who pay tax (PCB) on a monthly basis.
  • Corporate tax: reduced from 25% - 24%
  • Sales tax abolished, Goods and Services Tax to be implemented.
  • No GST on essential items such as cooking oil, spices, salted fish, rice, flour.
  • GST also exempted on electricity (partial exemption up to 200 units), piped water supply, public transportation.
  • Update on personal income tax: Highest income bracket increased from RM100,000 to RM400,000. Tax for this income bracket reduced from 26% to 24-25%.
  • Buying and selling houses, renting, not affected by GST.
  • 300,000 people who earn RM4,000 a month now no longer to pay income tax.
  • RM600 miilion grant for institutes of higher learning to encourage the publishing of international-class research papers.
  • Education: RM450 million to maintaining and improving old schools - SK, SJK(C), SJK(T), MARA, Sekolah Agama included; RM168 million for new schools; RM209 million for improving the quality of teaching in Malaysian schools.
  • 1Malaysia Book Voucher Program: RM250 for each student available
  • Transport: Subsidies for rural train commutes: For communities in rural Pahang and Kelantan.
  • Transport: RM15.3 billion allocated to centralise taxi industry administration and improve services industry-wide.
  • RM4.1 billion allocated for rural community development, especially in rural Sabah and Sarawak.
  • RM179 million to repair low cost homes nationwide.
  • Anti-crime measures: RM8.8 billion allocated to the police, RM13.2 billion allocated for armed forces.
  • CCTV to be installed in 25 crime hotspots.
  • RM200 million allocation for police to purchase additional equipment including firearms and forensic van.
  • National defence: RM75 million allocated to Eastern Sabah Security Command.
  • Army vets get RM8 million for 20,000  ATM vets
  • Healthcare: RM22.1 billion allocated to improving public healthcare system.
  • 50 new 1Malaysia Clinics in 2014, 6,000 new nurses to be trained.
  • RM3.3 billion allocated to providing the best medical supplies to public healthcare institutions.
  • Sugar subsidy reduced by RM0.34 as of October 26, 2014. The new price is RM2.84 per kg.
  • Allocations for the disabled: RM441million to develop amenities and provide help to the disabled.
  • Property: Government to revise Real Property Gain Tax or RPGT:
    -30% for properties held for 3 years or less.
    -20% (4 years) 15% (5 years and beyond)
    -RPGT for non-citizens: 30% (1-5 years), 5% (5 years and above).
  • Affordable housing: RM578 allocated to the National Housing Department to develop 16,473 residential units.
    -PR1MA to construct 80,000 new residential units at 20% lower than market prices.
    -subsidies for private developers to encourage construction of low and medium cost housing units.
Source: http://my.news.yahoo.com


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