Budget 2015 Highlights for Personal Finance

Budget MalaysiaPrime Minister Datuk Seri Najib Razak, who is also Finance Minister, unveiled 2015 budgets in the Parliaments on Friday, 10th October 2014. The theme for 2015 Budget “Accelerating Growth, Ensuring Fiscal Sustainability and Prospering the Rakyat.”

In 2015, economic growth is expected to remain strong between 5% and 6% while the fiscal deficit is projected to further decline to 3% of GDP.

The 2015 budget is formulated with focus on the people’s economy and outlines seven main strategies:

First Strategy: Strengthening Economic Growth;

Second Strategy: Enhancing Fiscal Governance;

Third Strategy: Developing Human Capital and Entrepreneurship;

Fourth Strategy: Advancing Bumiputera Agenda;

Fifth Strategy: Upholding Role of Women;

Sixth Strategy: Developing National Youth Transformation Programme; and

Seventh Strategy: Prioritising Well-Being of the Rakyat.

The following are 2014 Budget highlights for Personal Finance and Investment.

Area Description
Goods & Services Tax (GST) The following items are exempted from GST(i) All types of fruits whether local or imported;

(ii) White bread and wholemeal bread;

(iii) Coffee powder, tea dust and cocoa powder;

(iv) Yellow mee, kuey teow, laksa and meehoon;

(v) The National Essential Medicine covering almost 2,900 medicine brands. These medicines are used to treat 30 types of diseases including heart failure, diabetes, hypertension, cancer and fertility treatment;

(vi) Reading materials such as children’s colouring books, exercise and reference books, text books, dictionaries and religious books; and

(vii) Newspapers.

Electricity consumption that is not subject to GST will be increased from the first 200 units to 300 units. This will benefit 70 per cent of households.
Retail sale of RON95 petrol, diesel and LPG exempted from GST
Budget 2015 proposed to have a reduction of up to 4.1 per cent in the prices of 532 items or 56 per cent of the 944 goods and services in the basket of goods of the CPI
Income Tax Individual income tax rates will be reduced by 1 to 3 percentage points. 300,000 individual taxpayers will no longer pay income tax.
Household with monthly income of RM4,000 does not need to pay tax
Maximum chargeable income will be increased from exceeding RM100,000 to exceeding RM400,000. The current maximum tax rate at 26% will be reduced to 24%, 24.5% and 25%.
Tax relief for expenses incurred for treatment of serious diseases such as cancer, kidney failure and heart attack increase from RM5,000 to RM6,000 per year. The relief is available to the tax payer, spouse and children.
Financial assistance for the disabled (OKU). Tax relief for each disabled child from increase from RM5,000 to RM6,000 per year for the purchase of basic supporting equipment for the tax payer, spouse, children and parents.
Property Youth Housing Scheme. For married youth aged between 25 and 40 years with household income not exceeding RM10,000 to buy first house. The scheme offers loan with the maximum period of 35 years.Government will provide monthly financial assistance of RM200 to borrowers for the first two years to reduce the burden of monthly installment and also 50% stamp duty exemption on the instrument of transfer agreements and loan agreements.Will be offered on first-come first-served basis for 20,000 units only.
80,000 units under the 1Malaysia People’s Housing Programme (PR1MA). The ceiling of household income is raised from RM8,000 to RM10,000. In addition, a Rent-To-Own Scheme will be introduced specifically for individuals who are unable to obtain bank financing.
National Housing Department (JPN) will build 26,000 units under the People’s Housing Programme (PPR)
Syarikat Perumahan Negara Berhad (SPNB) to build 12,000 units of Rumah Mesra Rakyat (RMR) and 5,000 units of Rumah Idaman Rakyat. SPNB will also build 20,000 units of Rumah Aspirasi Rakyat on privately-owned land.
Extend the 50% stamp duty exemption on instruments of transfer and loan agreements and increase the purchase limit from RM400,000 to RM500,000. The exemption will be given until 31 December 2016.
Improve Skim Rumah Pertamaku under the purview of Cagamas by raising the ceiling price to RM500,000. The age of borrowers to qualify for the scheme will be increased from 35 to 40 years.
Tax on gains from the disposal of property (RPGT) be self-assessed by the taxpayer effective from the year 2016.
Lower Income Group BR1M increase from RM650 to RM950 for households with a monthly income of RM3,000 and below. It will be disbursed in three instalments of RM300 each to be paid in January and May with the balance of RM350 from September 2015
For households with a monthly income between RM3,000 and RM4,000, the Government will increase BR1M from RM450 to RM750. This assistance will be disbursed in three instalments, RM200 to be paid in January and May while the balance of RM350 from September 2015
Single individuals aged 21 and above and with a monthly income not exceeding RM2,000, BR1M will be increased from RM300 to RM350 a year.
Government will replace the group takaful insurance or i-BR1M with Family Bereavement Scheme. The new scheme will entitle the next of kin of BR1M recipients to receive RM1,000 effective for a year.
Government will develop a new mechanism for providing petroleum subsidy to ensure a more targeted subsidy.
Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN) 10% rebate is given to borrowers who continuously make repayments for 12 months until 31 December 2015.
An additional 20% discount will be offered to borrowers who make lump sum repayments from today until 31 March 2015.
Civil Servant Civil servants will be given half-month bonus
Increase the minimum eligibility for housing loans from RM80,000 to RM120,000 and the maximum eligibility limit from RM450,000 to RM600,000. RM100 processing fee for housing loan application will be abolished.
PPA1M houses. Reduce the minimum price of houses currently at RM150,000 to RM90,000 per unit with a minimum floor area of 850 square feet. Raise the qualifying requirement of household income from RM8,000 to RM10,000 per month and provide a facilitation fund of up to 25% from the project cost for developers participating in the scheme.


1 comment… add one
  • Useful summary from the whole 2 hours of speech.


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