OCTOBER 12 ― The highly anticipated Shared Prosperity Budget, which has been tabled by Finance Minister Lim Guan Eng was the second budget since Pakatan Harapan came to power in May 2018, clearly did not disappoint.
The first good news is shown by the growth in the Gross Domestic Product which stands at 4.7 per cent and 4.9 per cent in the first two quarters respectively.
The new government is also proud to inform that they managed to maintain inflation at the rate of 0.2 per cent in the first quarter of 2019 in comparison to 1 per cent in year 2018 and 3.7 per cent in the year 2017.
The government did consider the rakyat’s concern on the implementation of SST but after thorough review, the GST has proven to have resulted in higher pricing in comparison to the pricing after SST implementation. Therefore, the government is of the opinion that SST is more beneficial at the moment which will be the way moving forward.
It is the government’s vision to establish Malaysia as the preferred investment hub. The government is thoroughly studying and refining the incentive framework including the existing Promotion Investment Act 1968 and Income Tax Act 1967 which is estimated to result in a new framework to be completed by January 1, 2021. A new tax incentive package will be introduced to attract the Fortune 500 companies in Malaysia which will create more jobs for Malaysians with a target of 150,000 employment opportunities.
High income earners will be subjected to pay tax at a rate of 30 per cent for individuals who earn income above RM2 million. On the other hand, young parents are also eligible for increase in tax relief to RM2,000 per child from RM1,000 for sending their kids to approved kindergartens.
Corporate Tax Rates for chargeable income increases from first RM500,000 chargeable income to RM600,000 and will be taxed at 17 per cent, resulting in a tax savings of RM7,000 for Small Medium Enterprise (SME) Companies. Digital service tax will come into effect starting January 1, 2020.
Good news for property owners ― RPGT base year will be revised to January 2013. This will give some form of relief to those which sells their property.
We also will see the merger of the Special Commissioner of Income Tax with the Customs Appeal Tribunal which results in Tax Tribunal effective from 2021.
In conclusion, it is a Budget that took into account the issues raised by the rakyat. I would call it a Budget for all Malaysians.
* Datuk Harjit Singh Sidhu is the CEO of HSS Advisory Sdn Bhd whom specialises in tax audit and advisory for more than 30 years.
** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.