{"id":31913,"date":"2017-11-14T17:35:22","date_gmt":"2017-11-14T09:35:22","guid":{"rendered":"https:\/\/www.imoney.my\/articles\/?p=31913"},"modified":"2024-01-31T15:26:56","modified_gmt":"2024-01-31T07:26:56","slug":"budget-2018-winners","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/budget-2018-winners","title":{"rendered":"Budget 2018: Who Are The Biggest Winners?"},"content":{"rendered":"

The top concerns among Malaysians in the recent years have been the rising cost of living and the severely unaffordable housing. The same themes remain in the run-up to the Budget announcement this year, where cost of living and affordable housing dominate the forecast, especially among the urban dwellers.<\/p>\n

Many experts expected perks from the latest Budget to alleviate some of living cost pressure, as well as more aids in helping aspiring first-time home buyers.<\/p>\n

The latest Budget has a total allocation of RM280.25 billion, which was an increased by RM19.45 billion from Budget 2017. Operation expenditure was allocated RM234.25 billion, while development expenditure was capped at RM46 billion.<\/p>\n

Themed, \u201cProspering an inclusive economy, balancing between worldly and hereafter, for the well-being of the rakyat\u201d<\/em>, towards TN50 aspirations\u2019, Prime Minister Datuk Seri Najib Razak pulled quite a few surprised goodies from Budget 2018 for different groups of the population in the country.<\/p>\n

Here are some of the biggest winners from Budget 2018:<\/p>\n

<\/span>1) The M40<\/strong><\/span><\/h2>\n

The M40 as defined under Budget 2017, refers to the middle-income earners with a monthly household income of between RM3,860 and RM8,319.<\/p>\n

The latest budget, dubbed as the “mother of all budgets”, seems like a budget made with the M40 in mind. The most obvious perk for this group is the lowering of tax rate for income brackets between RM20,000 and RM70,000.<\/p>\n

This would especially be enjoyed by the M40 group with a household income of below RM9,000 a month in Year of Assessment 2018.<\/p>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t
Year of Assessment 2018<\/center><\/th>\n<\/tr>\n<\/thead>\n
<\/td>
Chargeable Income<\/center><\/td>
Rate %<\/center><\/td>
Tax (RM)<\/center><\/td>\n<\/tr>\n
On the first
\nOn the next<\/td>
RM5,000
\n RM15,000<\/center><\/td>

\n1%<\/center><\/td>
0
\n150<\/center><\/td>\n<\/tr>\n
On the first
\nOn the next<\/td>
RM20,000
\nRM15,000 <\/center><\/td>

\n3%<\/font><\/b><\/center><\/td>
150
\n450<\/font><\/b><\/center><\/td>\n<\/tr>\n
On the first
\nOn the next<\/td>
RM35,000
\nRM15,000<\/center><\/td>

\n8%<\/font><\/b><\/center><\/td>
600
\n1,200<\/font><\/b><\/center><\/td>\n<\/tr>\n
On the first
\nOn the next<\/td>
RM50,000
\nRM20,000<\/center><\/td>

\n14%<\/font><\/b><\/center><\/td>
1,800
\n2,800<\/font><\/b><\/center><\/td>\n<\/tr>\n
On the first
\nOn the next<\/td>
RM70,000
\nRM30,000<\/center><\/td>

\n21%<\/center><\/td>
4,600<\/font><\/b>
\n6,300<\/center><\/td>\n<\/tr>\n
On the first
\nOn the next<\/td>
RM100,000
\nRM150,000 <\/center><\/td>

\n24%<\/center><\/td>
10,900
\n<\/font><\/b>
\n36,000<\/center><\/td>\n<\/tr>\n
On the first
\nOn the next<\/td>
RM250,000
\nRM150,000<\/center><\/td>

\n24.5%<\/center><\/td>
46,900<\/font><\/b>
\n36,750<\/center><\/td>\n<\/tr>\n
On the first
\nOn the next<\/td>
RM400,000
\nRM200,000<\/center><\/td>

\n25%<\/center><\/td>
83,650<\/font><\/b>
\n50,000<\/center><\/td>\n<\/tr>\n
On the first
\nOn the next<\/td>
RM600,000
\n RM400,000<\/center><\/td>

\n26%<\/center><\/td>
133,650<\/font><\/b>
\n104,000<\/center><\/td>\n<\/tr>\n
On the first
\nAbove<\/td>
RM1,000,000
\nRM1,000,000<\/center><\/td>

\n28%<\/center><\/td>
237,650<\/font><\/b>
\n\u2026\u2026..<\/center><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

Based on the adjustment in the tax rates for the three income bands, if you are earning the median income of RM5,228 a month, it will translate to RM554 (25.5%) in savings.<\/p>\n

On top of that, homeowners who have been renting out their properties get a tax break from the rental income as well. Starting from Year of Assessment 2018 until 2020, landlords will be able to exempt 50% of their rental income of up to RM2,000 a month when they are filing for their income tax in 2019.<\/p>\n

<\/span>2) The youths<\/strong><\/span><\/h2>\n

Youths are the future of the country. As clich\u00e9 as that sounds, a country who does not put the welfare of their youths as a priority will face challenges in building a strong and robust economy in the future.<\/p>\n

Budget 2018 recognises the need to give today\u2019s youths a boost to help them find their footing economically. From helping them with their student loan to arming them with the necessary skills to generate income, the budget has them all.<\/p>\n

The rising cost and lack of financial planning affects youths as much as other segments of the society. According to Immigration Department statistics, PTPTN defaulters make up more than half of the 622,768 Malaysians barred from travelling overseas since 2010.<\/p>\n

In addressing that, the latest budget extended the repayment discount to 2018, in addition to extending the grace period from six months to 12 months. The grace period extension allows graduates up to a year to find a job and establish their finances before starting to pay their PTPTN loan.<\/p>\n

\"malaysia<\/p>\n

Based on a report by Bank Negara Malaysia<\/a>, youth unemployment has been on the rise in the recent period at 10.7% in 2015, which is more than three times higher than the national unemployment rate of 3.1%.<\/p>\n

In response to that worrying trend, RM4.9 billion has been allocated for Technical and Vocational Education Training (TVET), while RM4.5 million will be given for TVET Outstanding Student Scholarships.<\/p>\n

Overall, the restoration of the education allocation is seen as a positive move, and this will help build a foundation for the youths, and hopefully address the issue of youth unemployment in the long run.<\/p>\n

<\/span>3) The women<\/strong><\/span><\/h2>\n

Najib announced 2018 as the Year of Women Empowerment and it is evident in Budget 2018.<\/p>\n

One of the most talked about proposal from the Prime Minister was to increase the mandatory maternity leave for private sector from 60 days to 90 days.<\/p>\n

This positive move was lauded by Ibrahim Suffian, director of Merdeka Centre during the iMoney Post-Budget 2018 Live Forum held on October 31, 2017.<\/p>\n

\u201cWomen are increasingly holding positions of importance, and with more females in our tertiary-level education, it is timely to increase the mandatory maternity leave to improve female employee retention in the workforce,\u201d said Ibrahim.<\/p>\n

According to statistics released by the Department of Statistics Malaysia<\/a>, there has been a rise in overall female participation in the labour force in 2016 (54.3%) compared to the year before (54.1%). When we break it down to age groups, the female participation has declined between 35 years old and 44 years old, and 45 years old to 54 years old.
\nTo encourage more women to rejoin the workforce, women who have been on a two-year career hiatus or more will be given 12 months income tax exemption.<\/p>\n

\"malaysia<\/p>\n

Both measures will boost the momentum of the country\u2019s collective effort in raising female participation in the workforce and also in decision-making position.<\/p>\n

According to 30% Club Malaysia, a business group campaigning for more female directors on company boards, said only 95 out of 928 listed companies has achieved 30% women board representation<\/a>, while 372 companies has not had a single woman at all on their boards.<\/p>\n

This shows that much still need to be done to encourage women talent to rejoin or stay in the workforce. Increasing mandatory maternity leave days and offering tax exemption are both positive move in this effort.<\/p>\n

<\/span>4) First-time homebuyers<\/strong><\/span><\/h2>\n

The issue of affordable housing has been a hot topic for the past few years. In the past few budgets, every Malaysian would wait for new measures or schemes from the Government on how they can make housing more affordable for the people.<\/p>\n

It is no different this year. From increasing Real Property Gains Tax (RPGT) to curb speculation in the property market, to increasing the number of PR1MA and other affordable homes, we\u2019ve seen them all.<\/p>\n

As of April this year, 1,426,727 Malaysians have registered with PR1MA, with 166,972 applying for PR1MA housing. PR1MA\u2019s Member of Corporation has approved the construction of 265,033 units, with 139,419 currently under various stages of construction.<\/p>\n

This year, a whopping RM2.2 billion has been allocated for affordable housing for the following:<\/p>\n

\"malaysia<\/a><\/p>\n

Other than PR1MA housing, more efforts are being put into making housing affordable and living comfortable for the B40 through Projek Perumahan Rakyat (PPR), Rumah Mesra Rakyat under SPNB and My Beautiful New Homes (MyBNHomes). There will 25,000 units of affordable homes under 1Malaysia Civil Servants Housing Programme (PPA1M) ready by 2018 with 128,000 units under various stages of development.<\/p>\n

For existing affordable housings, a whopping RM200 million is allocated under the 1Malaysia Maintenance Fund to upgrade and repair these houses.<\/p>\n

However, the proposal that is most talked about is the extension of step-up financing scheme to private developers. The scheme was first introduced under PR1MA in the previous budget.<\/p>\n

Here\u2019s how the PR1MA scheme works:<\/p>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t
PR1MA end-financing scheme<\/center><\/th>\n<\/tr>\n<\/thead>\n
Exclusive for PR1MA homebuyers and offers a packaged loan consisting of:
\n
\n\u2022\tStepped-up financing for the first 5 years of the loan
\n\u2022\tEPF Account 2 withdrawal for the purpose of PR1MA home instalment up to retirement or end of tenure
\n<\/center><\/td>\n<\/tr>\n
What does \"stepped-up\" financing mean?<\/b><\/td>\u2022\tFirst 5 years: Interest only
\n\u2022\tSubsequent years: Interest and principal*<\/td>\n<\/tr>\n
Which banks offer this scheme?<\/b><\/td>PR1MA's panel banks: Maybank, CIMB, RHB and AmBank<\/td>\n<\/tr>\n
Those blacklisted through CCRIS are not eligible for the scheme<\/b><\/center><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n*Homebuyers can choose to start early repayment of both principal and interest within the first 5 years, depending on their affordability.
\n*Buyers can also choose to either or both when it comes to stepped-up financing or through EPF.<\/i>
\n
\nSource:PR1MA<\/i><\/span>\n\n

\u00a0<\/em><\/p>\n

Find out more about the <\/em>PR1MA step-up financing scheme<\/em><\/a> here.<\/em><\/p>\n

This essentially helps first-time home buyers to manage their cash flow better in the first few years of home ownership, assuming that wages will increase over time.<\/p>\n

However, not much details have been released on this scheme for private developers, such as the criteria or requirements these developers need to fulfil in order to be eligible for the scheme.<\/p>\n

By extending the scheme to private developers, this move some of the pressure off the Government on affordable housing as private developers are encouraged to undertake more affordable housing developments in the future.<\/p>\n

<\/span>5) Digital entrepreneurs<\/strong><\/span><\/h2>\n

One of the biggest drivers of economic growth is entrepreneurship. The Malaysian Small and Medium Entreprises (SME) sector contribution to the country’s gross domestic product (GDP) is on track to achieve its target of 41% of GDP<\/a>.<\/p>\n

New and small businesses spur job growth, spark new trends and drive new technologies in various industries. This is especially evident in the millennial generation.<\/p>\n

Surveys<\/a> suggest that millennials value entrepreneurship and start-ups more than previous generations, with more millennials exploring and delving in entrepreneurship and loving the idea of being self-employed.<\/p>\n

With talk on the Industrial Revolution 4.0 (IR 4.0) and the launching of the Digital Free Trade Zone (DFTZ), significant allocations are given in Budget 2018 for digital entrepreneurship.<\/p>\n

The DFTZ went live on November 3 recently, witnessed by Najib and Jack Ma, the founder and executive chairman of Alibaba Group.<\/p>\n

The DFTZ\u00a0comprises of an eFulfilment hub, a satelite services hub and an eServices platform. Under Budget 2018, RM83.5 million was allocated for the construction of the first phase of DFTZ in Aeropolis, KLIA. More than 1,900 SMEs are involved in the first phase of DFTZ and this number is expected to grow even more.<\/p>\n

For IR 4.0, the government will offer a matching grant worth RM245 million under the Domestic Investment Strategic Fund to upgrade smart manufacturing facilities to support the IR 4.0 business and investment activities.<\/p>\n

To form a \u201cconducive ecosystem\u201d and benefit from innovation, especially ideas from local start-ups, the regulatory sandbox approach will be expanded to assist companies in testing their innovative ideas and business models, which will be implemented by all related regulators.<\/p>\n