With the Malaysian budget for 2016 being announced, it seems like an apt time to revisit the budget of 2015 and see how far Malaysia has progressed. Like every other country, there is a lag between what was promised and what has been delivered and this is evident with a revision to the 2015 budget earlier this year. 2015 was marked with fluctuating prices in petrol and erratic valuation of currencies and not to forget GST. But 2015 wasn’t a downward slope, it had its fair share of positive call outs as well. With the onset of the 2016 budget, here a look at the highlights of the budget announced in 2015 and what lies in store for us this year.
The budget for 2015 was announced in October of 2014 and carried the news of the impending GST looming upon us it did have some good news as well which did its fair share to perk up the nation
1) With the unpopular onset of GST, Malaysians could now look forward to the abolishment of the Sales and Service Tax (SST). This even though sounded poplar, in reality caused a lot of confusion especially with the levying of the service charges in hotels and restaurants. The situation as it stood was a simple one in which the service tax levied by such establishments would be abolished but the service fee would remain the same as it is has nothing to do with the government not tied up to any government policies. The tax collected is paid up to the government whereas the service fee is a charge levied for the services provided by the establishment. It goes solely to the service provider and is not paid back to the government.
Whether coughing up money on a service charge is fair or not is a question that should be aimed at establishments and service providers and not the government.
2) Infrastructure: The 2015 budget saw the implementation of infrastructure projects to improve the ever increasing and congested traffic scenario and provide ease of transportation. The improvement of Malaysia’s public transportation and road alternatives were the need of the hour and the budget saw 4 new highways that were to be implemented were the DASH or Damansara – Shah Alam highway, the EKVE or the Easter Klang valley Expressway, the SUKE or Sungai Besi Ulu Klang expressway and the west coast expressway ranging from Taiping to Banting. Along with the 4 highways, New MRT/LRT lines such as the 56 KM second MRT line starting from Selayang leading to Putrajaya and the LRT 3 project which will Bandar Utama to Shah Alam and Klang were also announced.
3) The communications and Multimedia Commission formed a Digital Content Industry Fund with a fund of over RM 100 Million to provide the creative industry a much needed boost.
4) Telecommunications saw a boost in the 2015 budget with provisions for increased access to high speed broadband internet and was allocated a budget of RM 2.7 Billion in order to lay undersea cables and build over 1000 new telecommunication towers.
5) To support local entrepreneurs, a provision of loans amounting to more than RM 3.1 Billion was announced by TEKUN. These provisions were allocated through demographic requirements with Bumiputera entrepreneurs standing to receive RM 350 Million and Indian entrepreneurs to receive RM 50 Million. Women entrepreneurs stood to access RM 50 Million from this fund with another RM 50 Million being allocated to the Armed Forces Veterans.
6) The unpopular GST was given a slight make over by announcing some much needed exclusions especially for the basic necessities such as fruit, groceries, bread, coffee and tea. It also made provisions to exclude the charge of GST on the first 300 units of electricity consumed and petrol.
7) The Income tax was lowered to a range between 1-3% and was based on income tiers for the assessment year of 2015 and onwards only.
8) PTPTN borrowers were provided encouragement to repay by offering discounts of up to 10% for monthly repayments made diligently and those who made repayments through lump sums within a stipulated period stood to receive discounts of up to 20%.
9) A plethora of initiatives were announced to improve spur the participation of women in the workforce and encourage growth of Bumiputera entrepreneurship
10) Baucher Buku 1Malaysia (BB1M) scheme was set to be continued and provided an amount of RM 250 for all students.
11) The maximum tax relief provided for treatment of serious and deadly illnesses such as cancer, heart attack and kidney failure was increased to a slab of RM 6000, 20% higher than the previous slab of RM 5000. The tax relief provided to couples with disabled children was also increased by 20%, from RM 5000 to RM 6000
12) Financial assistance provided to poor families, children, senior citizens and the disabled (OKU) was set to be increased to RM350 for the employed and RM200 for the unemployed.
13) The issue of housing was addressed with the intent to provide affordable housing units under the purview of the People’s Housing Programme and the Syarikat Perumahan Negara Berhad.
What one can look forward to in the coming year and the new budget and its impact on the country’s economy will be very hard to predict. The global downward pressure on oil prices, a fall in the currency and rising costs has added to the difficulties faced by the government in preparing the budget. As difficult as it may seem and as troubling as it may be, some fears are misplaced and the government has made announcements of providing something for everybody but has asked the people to keep realistic expectations due to global economic changes.