On 27 October 2017, the Prime Minister of Malaysia formally introduced the 2018 Malaysian Budget (the Supply Bill (Budget) 2018) in Dewan Rakyat.
The 2018 Budget promises an allocation of RM280.25 billion (RM234.25 billion for Operating Expenditure and RM46 billion for Development Expenditure), excluding Contingencies savings of RM2 billion. This article highlights the key proposals under the 2018 Malaysia Budget.
1. Reduction in personal income tax
- RM20,001 – RM35,000: 5% to 3%
- RM35,001 – RM50,000: 10% to 8%
- RM50,001 – RM70,000: 16% to 14%
- 50% tax exemption on rental income received by Malaysian resident individuals, for monthly rental of residential homes not exceeding RM2,000, effective from 2018 to 2020.
2. Improved Transportation System
- RM32 billion to build MRT2 (connecting Sungai Buloh – Serdang – Putrajaya).
- Accelerate the construction of MRT3, expected to be completed by 2025.
- High Speed Rail Project (connecting KL – Singapore) expected to be completed by 2026.
- Upgrade Pulau Pinang International Airport and Langkawi International Airport.
3. Abolish Several Toll Avenues, Effective from 1st January 2018.
- Abolish toll collections at Batu Tiga and Sungai Rasau, Selangor.
- Abolish toll collections at Bukit Kayu Hitam, Kedah.
- Abolish toll collections at Eastern Dispersal Link, Johor.
4. Reduced Bureaucracy in Hiring Maids
- Employers are allowed to hire foreign domestic helpers from 9 selected countries directly without agents, via online application through the Immigration Department of Malaysia with the current levy and processing fees.
5. Revised GST Provisions
- No GST for reading materials, effective from 1st January 2018.
- No GST for services provided by local authorities, effective from either April 2018 or October 2018, depending on the local authorities’ preferences.
- No GST for construction of schools and houses of worship funded through donations.
- No GST for the management and maintenance services of stratified residential buildings and the management of corporations, effective from 1st January 2018.
- 2 billion scholarships allocated for higher education.
- RM90 million scholarships for MyBrain for postgraduate studies (ie: Masters and PhD)
- Book Voucher of RM 250 for students in Higher Learning Institutions and Form Six.
- Discount for repayment of PTPTN loans extended till 31st December 2018:
- 20% on the outstanding debt for full settlement;
- 10% for repayment of at least 50% on the outstanding debt made in a single payment;
- 10% for repayment through salary deductions or scheduled direct debit.
7. Special Benefits
- Special assistance to Civil Servants of RM1,500.
- Increase allowance for senior citizens for RM350 per month.
- RM245 million assistance for children from poor families.
- Increase allowance by RM50 per month for working and unemployed persons with disabilities and their carers.
- Increase maternity leave from 60 days to 90 days for female workers in private sectors.
- Allow public servants with 5 months pregnancy onwards to leave work one hour earlier.
8. Housing Projects
- 2 billion to fund housing projects including 17,300 units of People’s Housing Programme; 3,000 units of People’s Friendly Home under SPNB; 210,000 units of houses under PR1MA with prices RM250,000 and below.
- Stamp duty exemption for loan agreements and letter of consent to transfer are given to rescue contractors and original owners of abandoned housing projects, effective 1st January 2018 to 31st December 2020.
9. Wellbeing for the Chinese and Indian Community
- RM50 million loans for SMEs through Koperasi Jayadiri Malaysia Berhad (KOJADI).
- RM30 million loans for the 1Malaysia Chinese Hawkers and Petty Traders Foundation.
- RM75 million to develop and refurbish Chinese New Villages.
- RM50 million for Indian Community Entrepreneur Development Scheme (SPUMI) under Tabung Ekonomi Kumpulan Usaha Niaga (TEKUN).
- 5 billion additional units of Amanah Saham 1Malaysia for the Indian community.
- 5 billion for medical supplies and RM1.6 billion for consumable medical items.
- 4 billion for upgrading and maintaining healthcare facilities, medical equipment and ambulances.
- RM100 million for upgrading hospitals and clinics.
- RM90 million for haemodialysis assistance and the Medical Aid Fund.
- RM40 million for the treatment of rare diseases and to create awareness about non-communicable diseases.
- RM1 billion for the construction of women and children wards at Tengku Ampuan Afzan Hospital and Putrajaya Hospital.
- RM500 million for the construction of specialist clinic and wards at Pulau Pinang Hospital.