On Friday 23rd October 2015, Prime Minister Datuk Seri Najib Tun Razak who is also Finance Minister unveiled Budget 2016 focusing on ensuring Malaysia remains a competitive economy without sacrificing the people’s needs and interests.
The Budget 2016 is to ensure inclusive and sustainable growth in the years leading to 2020 when Malaysia aims to be a high-income, advanced economy. This budget is the first of five annual budgets under the 11th Malaysia Plan. RM267.2bil will be allocated under Budget 2016, compared with the revised RM260.7bil in 2015.
The theme for the Budget 2016 is “Prospering the Rakyat” which is based on five priorities as follows:
1. Strengthening Economic Resilience
2. Increasing Productivity, Innovation and Green Technology
3. Empowering Human Capital
4. Advancing Bumiputera Agenda
5. Easing the Cost of Living of the Rakyat.
The following are 2016 Budget highlights for Personal Finance and Investment.
|Income Tax||Tax relief for a child below 18 will be raised from 1,000 to RM2,000 next year|
|Relief for an individual taxpayer whose spouse has no income will be raised from RM3,000 to RM4,000|
|Maximum relief on tuition fee for an individual taxpayer is increased to RM7,000 from RM5,000 for those who pursuing higher education.|
|Tax relief of RM8,000, up from RM6,000 for parents of children with disabilities (OKU) who currently further their studies.|
|Tax exemption for each child aged 18 and above furthering their studies, in local or overseas institutions, will be increased from RM6,000 to RM8,000.|
|Tax exemption for supporting parents of RM1,500 each father & mother. Individual parent does not earn more than RM2,000 per month by themselves and are above 60 years. Applicable even if they are not living in the same residence|
|Chargeable income of RM600,000 and RM1mil will be taxed at 26% (from 25%) and those above RM1mil will be taxed 28% (from 25%)|
|Lower Income Group||RM250 1Malaysia Book Voucher Programme for 1.2 million students.|
|RM100 schooling assistance for households with a monthly income of RM3,000 and below which will benefit 3.5 million students.|
|Increased the BR1M payment from RM650 to RM950 for households with a monthly income of RM 3,000 and below, from RM450 to RM750 for middle-income households earning between RM3,001 and RM4,000. Single individuals aged 21 and above with a monthly income of below RM 2,000 was increased from RM300 to RM350.|
|Housing||PR1MA would build 175,000 houses, which will be sold at 20% below market prices, with an allocation of RM1.6bil.|
|Syarikat Perumahan Negara Berhad (SPNB) would build 10,000 units of Rumah Mesra Rakyat with a subsidy of RM20,000 for each house through an allocation of RM200mil.|
|Build 100,000 houses, priced between RM90,000 and RM300,000, under Perumahan Penjawat Awam 1 Malaysia (PPA1M) by 2018.|
|Build 22,300 units of apartments and 9,800 units of terrace houses under the Peoples Housing Programme (PPR) with an allocation of RM863 million|
|Build houses for the second generation of settlers comprising 20,000 units by FELDA, 2,000 units by FELCRA and 2,000 units by RISDA. For houses built by FELDA, the maximum price is reduced to RM70,000 from RM90,000 previously.|
|First House Deposit Financing Scheme under KPKT to assist first-time house buyers of affordable houses to pay the deposit with RM200 million allocations|
|Salary & Pension||Minimum starting salary in the civil service at RM1,200 a month, which will benefit 60,000 civil servants.|
|Minimum pension rate at RM950 a month for pensioners with at least 25 years of service, which will benefit almost 50,000 pensioners.|
|Effective from 1 July 2016, the national minimum wage will be increased from RM900 to RM1,000 per month for Peninsular Malaysia and from RM800 to RM920 for Sabah, Sarawak and the Federal Territory of Labuan. The new minimum wage will be implemented in all sectors except for domestic services or domestic maids.|
|Goods & Services Tax (GST)||Zero-rating of all types of controlled medicines under the Poisons List Group A, S, C and D as well as an addition of 95 brands of over-the-counter medicines.|
|Zero-rating of soybean-based milk and organic-based milk for infant and children, Dhal, Lotus root and water chestnut, Mustard seeds, Jaggery powder Dried mee kolok.|
|For Mobile Prepaid, rebates equivalent to the amount of GST paid, which will be credited directly to their prepaid accounts. Will be effective from 1 January 2016 to 31 December 2016.|