Taxation

Malaysia’s Budget 2011

Following KLM’s extremely popular article, Malaysia’s Budget 2010, we’re bringing you new highlights of Malaysia’s 2011 Budget this year.

For the year 2011, there are some notable changes that the Rakyat should look at.

Personal & People’s Budget 2011

  1. Exemption on sales tax for all Mobile Phones
  2. Service tax raised from 5% to 6%
  3. Service tax imposed on paid television broadcasting services (e.g. Astro)
  4. Excise duty exemption on National Vehicles, purchased by the disabled, to be raised from 50% to 100%
  5. Tax relief of RM5,000 to be extended for employ caretakers for parents, day care centers & other caring daily needs
  6. 50% stamp duty exemption for first time property (residential, house) buyers on loan agreement instruments
  7. Special Financial Assistance of RM500 provided to all civil servants of Grade 54 and below, including retirees & contract officers
  8. Amount of loan for low cost houses raised from RM10,000 to RM20,000 for Support Group 2
  9. Maximum loan eligibility raised up to RM450,000 from RM360,000 per pax, starting Jan 1st 2011
  10. Funeral Arrangement Assistance rate increased to RM3,000
  11. You can now have the chance to determine how many days are your fully-paid maternity leave, not exceeding 90 days from the current 60 days subject to a total of 300 days of maternity leave throughout your tenure of service
  12. Introduction of “Skim Rumah Pertamaku” providing a guarantee of down payment of 10 percent for houses below RM220,000 for first-time house buyers
  13. Estate workers can now own low-cost houses through BSN scheme
  14. Establishment of a “1Malaysia Smart Consumer” portal
  15. 1MDB (1Malaysia Development Berhad) will supply multiple types of vitamins to primary school children, low income group.
  16. Monthly consumption of RM20 electricity rebate remains active.
  17. PLUS highway toll rates will not be raised in the next 5 years.
  18. Application for PR (Permanent Resident) status can only be submitted after staying in Malaysia for 5 or more years.

Human & Non-human Development Projects & Spending

  1. Affordable houses will be built in Sg. Buloh (Selangor) amounting to RM10 billion, aimed to be completed by 2015.
  2. Malaysia’s next new landmark is to be built – “Warisan Merdeka”, a 100-storey tower at RM5 billion, to be completed by 2015.
  3. Development of large-scale integrated Aquaculture Zones in Pitas, Sungai Telaga & Sungai Padas (Sabah) and Batang Ai & Tanjung Manis (Sarawak) with RM252 million budget allocation.
  4. Construction and repair of 12,000 houses nationwide particularly in Sabah and Sarawak with an allocation of RM300 million.
  5. RM135 million will be allocated to agricultural farmers for basic infrastructure costs to encourage participation & activities in high value agriculture activities.
  6. RM85 million allocated to facilitate basic infrastructural facilities for construction of hotels & resorts in remote areas of Malaysia to promote tourism.
  7. RM50 million to construct shaded walkways in KLCC – Bukit Bintang areas.
  8. Construction and repair of 12,000 houses nationwide particularly in Sabah and Sarawak with an allocation of RM300 million.
  9. RM3 billion for development of the world’s first integrated eco-nature resort in Sabah by Nexus Resort Karambunai starting 2011.
  10. RM850 million for infrastructure support to corridor and regional development.
  11. RM119 million for local content creation, hosting local content and unlocking new channels for content developments.
  12. RM411 million allocated for research, development and commercialization activities as a platform for enhancing value-added activities, spanning across a diverse group of economic sectors.
  13. RM200 million to purchase creative products such as high quality locally produced films, dramas, documentaries and rich media.
  14. Increasing enforcement, coverage and audit on tax for all parties that are taxable.
  15. Restructuring and strengthening of the education & training sector. RM29.3 billion for the Education Ministry, RM10.2 billion for the Higher Education Ministry and RM627 million for the Human Resources Ministry.

Budget 2011 Resources Allocations & Facts

  1. RM212 billion is proposed for the Malaysia’s 2011 Budget, where it is 2.8% higher than the budget allocated for 2010.
  2. RM162.8 billion for Operating Expenditure.
  3. RM49.2 billion for Development Expenditure.
  4. Under the Operating Expenditure, RM45.6 billion is allocated for Emoluments, RM28.2 billion for Supplies and Services, RM86.4 billion is allocated to Fixed Charges and Grants.
  5. RM1.4 billion for the Purchase of Assets while RM1.2 billion for Other Expenditures.
  6. For Development Expenditure, RM28.3 billion is allocated to the economic sector for infrastructure, industrial, agricultural and rural development.
  7. RM15.5 billion will be allocated to the social sector, including education and training, health, welfare, housing and community development.
  8. RM4.4 billion for the development of the Security Sector.
  9. RM955 million for General Administration.
  10. RM2 billion Contingencies.
  11. Federal Government revenue collection is estimated to increase 2.3% to RM165.8 billion in 2011 when compared with RM162.1 billion in year 2010.
  12. Federal Government deficit for 2011 is expected to further decline to 5.4% of GDP, compared with 5.6% in 2010.

Malaysian Public Service

  1. For the Ministry of Education, a sum of RM6.4 billion is allocated for Development Expenditure to build and upgrade schools, hostels, facilities and equipment as well as uphold the status of the teaching profession.
  2. RM213 million allocated to reward high performance schools and remuneration of Principals, Head Teachers and Excellent Teachers.
  3. The Malaysian Government will increase pre-school enrolment rate to a targeted 72% by end 2011 through additional 1,700 clases, strengthen the curriculum as well as appoint 800 pre-school graduate teachers.
  4. The Government allocated RM111 million for PERMATA programme including the construction of the second phase of Sekolah PERMATA Pintar school complex, 32 PERMATA Children Centres (PAPN) and financing operations of 52 completed PAPNs.
  5. RM250 million allocated for Development Expenditure for religious schools, Chinese-type schools, Tamil national schools, missionary schools and Government-assisted schools nationwide.
  6. The Malaysian Government will provide assistance per capita for primary and secondary rakyat religious schools with an allocation of RM95 million.
  7. RM576 million allocation in the form of scholarships for those wishing to further their studies.
  8. RM213 million is allocated to enhance proficiency in Bahasa Malaysia, strengthen the English language as well as streamline the standard curriculum for primary schools.
  9. The Government will recruit 375 native-speaking teachers including from the United Kingdom and Australia to further enhance teaching of English.
  10. The number of PhD qualified academic staff will be increased to 75 percent in research universities and to 60 percent in other public institutions of higher learning with an allocation of RM20 million.
  11. Full import duty and 50% excise duty exemption was granted to franchise holders of hybrid cars.
  12. Allocation of RM500 million for the implementation of 1Malaysia Training Programme by Community Colleges, National Youth Training Institutes, Giat Mara and Industrial Training Institutes to commence in January 2011.
  13. The establishment of National Wage Consultation Council as the main platform for wage determination.
  14. The establishment of 1Malaysia Youth Fund with an allocation of RM20 million.
  15. Increase in monthly allowance for the Chairman of JKKK and JKKP, Tok Batin, Chairman of JKKK Orang Asli and Chairman of Kampung Baru to RM800 compared with RM450 currently.
  16. The abolishment of the Competency Level Assessment or PTK to be replaced with a more suitable evaluation system by June 2011.
  17. Extension of services of Pegawai Khidmat Singkat for an additional period of one year from December 2010.
  18. Introduction of the Distribution of Essential Goods program to standardize prices across areas.
  19. Introduction of the Retail Shop Transformation Programme, Automotive Workshop and Community Market projects.
  20. The launch of a Private Pension Fund in 2011.The launch of Bumiputera Property Trust Foundation with the size of RM1 billion and syariah-compliant.
  21. A review of the current minimum bankruptcy limit of RM30,000.
  22. The application for Permanent Resident status may be submitted after five years of residence.
  23. Providing four buses for Mobile Clinic.
  24. Formulating a new development model for Orang Asli.
  25. JHEOA will be restructured and strengthened as Jabatan Kemajuan Orang Asli.