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Friday, October 17, 1997

1998 Budget highlights

PROPERTY/INVESTMENT:

  • Thirty per cent quota on sale of condominiums of over RM250,000 to foreigners be increased to 50%.
  • Foreign interest allowed to buy two units of condominiums, with additional units subject to having incorporate a company.
  • Permanent residents allowed to buy dwellings priced below RM250,000 but above RM60,000 on condition that the spouse is a Malaysian citizen or he has applied for Malaysian citizen status.
  • Reinvestment allowance given to promote investment activities like expansion, diversification and modernisation be restricted to increase productivity.
  • Securities Commission to introduce a futures contract on ringgit that will be traded on the Malaysia Monetary Exchange.
  • SC to amend rules on protection of investors assets held by stockbroking firms.
  • All broking firms must increased their capital in one year. Those without sufficient capital to support business will have to scale down activities, merge or have their licence revoked.
  • Real property gains tax (RPGT) on non-residents to be imposed at a 5% rate if disposal of real property takes place after the fifth year.

EDUCATION:

  • Government to allocate RM12.458bil for education, with emphasis on development and upgrading of technology in teaching and educational techniques.
  • Time promotion scheme for teachers will be implemented.
  • Vehicle and computer loans facilities amounting to RM100mil for teachers.
  • A sum of RM2.881bil allocated for operating requirement of institutions of higher learning and increasing student population and construction of new campuses.
  • A sum of RM676.5mil to be allocated for the development of infrastructure and training of 36,902 workers and 360 instructors in industrial training institutes.
  • A sum of RM119mil allocated for implementation of Smart Schools in 90 selected schools.

EXPORTS:

  • Companies exporting goods having 30% value-added to get income tax exemption equivalent to 10% of the increase in export value.
  • Companies exporting products having 50% value-added to get income tax exemption equivalent to 15% of the increase in export value.
  • Agriculture and service-sector companies to get one-tier income tax exemption equivalent to 10% of the increase in export value.
  • Duty on petroleum exports cut.
  • A special building allowance of 10% for warehouses used for purposes of export and re-export.

CORPORATES:

  • Corporate tax cut to 28% from 30%.
  • Companies exporting products having 50% value-added to get income tax exemption equivalent to 15% of the increase in export value.
  • Double deduction for income tax be given to expenditure incurred on advertising locally.

TRANSPORT:

  • Import duties on CBU cars to increased to between 140% and 300% from between 140% and 200%.
  • Import duty on CBU vans be increased to between 42% and 140% from 35%.
  • Import duty on CKD vans be increased to a maximum of 40% from 5%.
  • Import duty on CBU four-wheel-drive and multipurpose vehicles to be increased to between 60% and 200% from 50%, and on CKD to 40% maximum from 5%.
  • Import duty on CBU motorcycles be increased to between 80% and 120% from 60%, and on CKD to be increased to 30% maximum from 5%.
  • Credit ceiling for hire purchase of passenger cars be reduced to 70% from 75% and repayment period must not exceed five years.

CONSTRUCTION:

  • All imports of heavy machinery for construction sector to obtain MITI's approval.
  • Import duty on construction materials to be increase to between 10% and 30%, from between 5% and 25%.
  • Import duty of 5% to be imposed on construction industry's heavy machinery and equipment like tower cranes and forklifts.
  • Import duty on dumpers and multi-purpose vehicles to be raised from between 0 and 30% to 50%.
  • Import duty on special-purpose vehicles like crane lorries and concrete mixer lorries be increased to 50% from 35%.
  • Rate of initial capital allowance for imported heavy machinery be reduced to 10% from 20%.

THE HOME/PERSONAL:

  • Import duties on a number of consumer durables like refrigerators be increased to 30% from 25%.
  • Concessionary tax rate of five per cent on life reinsurance income.
  • Fees for international travel document be increased to RM300 and RM600 from RM145 and RM265, and fees for restricted travel document be increased to RM150 from RM60.
  • Additional relief for children studying in higher institutions abroad be withdrawn.
  • Tax deduction on voluntary EPF contribution be increased to 7% from 5%.
  • A tax rebate of RM400 for purchase of personal computer by each family.
  • Duties on leather goods, ties, jackets reduced.

HEALTHCARE:

  • An investment allowance of 60% be given to private hospitals to qualifying capital expenditure incurred to establish special wards for lower-income group patients.
  • Income tax deduction for individuals contribution in providing health facilities up to RM20,000.
  • A sum of RM3.494bil provided for further enhancement of standard and quality of medical and public health services and extension of specialist services to states and districts.

DEVELOPMENT:

  • A RM2.08bil allocation for facilities for education, training and health.
  • The XIV Commonwealth Games, education and health, poverty eradication and rural development not to be affected by the 2% cut in government expenditure.
  • A RM1bil fund will be set up to further promote development of SMIs.
  • Designing and prototyping activities to given R&D incentives.
  • A sum of RM400mil allocated to enable government agencies to develop information technology and electronic government.
  • Commercialisation of Research and Development activities to be further implemented.
  • A sum of RM498mil allocated to build 5,200 housing units for armed forces, police, customs, immigration officers, prison warders and government servants at KLIA.