Budget 2018 - summary and review

2018 Federal Budget

Revenue: 239.8b

Allocation: 280.2b (2017: 260.8b)

• Operating Expenditure: 234.2b
• Development Expenditure: 46.0b

2018 Economic Performance

• GDP: 5.0-5.5% (2017:  5.2-5.7%)
• Income Per Capaita: RM42.7k (2017: RM40.7k)
• Fiscal Deficit: -2.8% of GDP (2017: -3.0%)
• Foreign Reserves: RM428.7b (as at Oct 2017)

2018 Budget Focus

1. Invigorating investment, trade and industry.
2. Moving towards TN50 aspirations.
3. Empowering education, skills and training, and talent development.
4. Driving inclusive development
5. Prioritizing the well-being of rakyat and providing opportunities to generate income.
6. Fortifying the fourth industrial revolution and digital economy.
7. Enhancing efficiency and delivery of GLCs & public service.
8. Balancing between the worldly and hereafter.

2018 Simplified Budget Highlights

1. Tax

Income Tax

• Reduction income tax rates 2% (RM20k-70k income bands)
• Tax exemption 12 months women re-entry workforce after 2 years work break
• 50% rental tax exemption for rent RM2k below
• Employer tax deduction for hiring PWDs (Persons With Disabilities)

GST

• Local authorities services: No GST
• Magazines and comics: No GST
• Management and maintenance of stratified residential buildings: No GST
• Construction of school buildings and places of worship from donations: Full GST relief

2. Financial Aids & Cash Handouts

• BR1M: continued (cap remains at RM1.2k)
• Malaysian Children Trust Fund (ADAM50) RM200 for children born 2018-2022
• Schooling Assistance: RM100
• Senior Citizens: RM350 allowance / mth
• PWD: RM50 allowance / mth
• Paddy Farmers: RM600 / 3 mths
• Civil Servants: RM1.5k bonus; Retired Civil Servants: RM750
• Civil Servants: min pension RM1k
• Imam, Bilal, KAFA and takmir teachers: RM1.5k and monthly allowance RM850
• Tok Batin & Village Heads: RM1.5k
• FELDA Settlers: RM5k

3. Education

• Science, Technology, Engineering, and Mathematics (STEM) Centre establishment
• Computer Science and programming modules for primary and secondary school students
• Upgrading 2,000 classrooms to 21st Century Smart Classrooms
• RM250 book voucher assistance
• RM2.2b scholarships
• RM3k for parents of Orang Asli on enrolment to IPTA
• MyBrain: Post-graduate studies
• 14 new sports complexes

PTPTN

• PTPTN discount continued (20% full settlement; 10% for 50%; 10% regular deduction)
• Loan repayment begins 12 months after (previously 6 months)
• Combining of multiple higher study loans with repayment after completion higher study

4. Housing

• Low cost-homes and affordable housing
  • PPR: 17.3k units
  • Rumah Mesra Raykat: 3k units
  • PR1MA: 210k units
  • PPA1M: 25k units
  • MyBNHomes: 600 units
  • MyDeposit & MyHomes: 2k units
• Step-up financing PR1MA for private developers
• Stamp duty exemption for loan agreement and letter of consent to transfer
• Joint-home financing between spouse/parent-child as long one applicant is a public servant

5. Women & Childcare

• 2018 Women Empowerment Year
• Maternity leave private sector: increase 60 to 90 days
• Maternity total leave: increase 300 to 360 days (max 90 per year)
• GLCs, GLICs & Statutory Bodies min 30% women on board of directors
• Childcare centre requirement for all new office buildings

6. Investments

SSP1M (Previously known as SSPN)

• For children’s higher education
• Matching grant RM500 with total contribution RM500 (withdraw only after age 18)
• RM6k tax relief extended until 2020
• 
  

SP1M (Simpanan Persaraan 1Malaysia or 1 Malaysia Retirement Savings Scheme)

• For self-employed, without a fixed income and business owners
• Increased matching to 15% capped at RM250 annually (previously 12% capped RM120)
• Extended until 2022

8. Logistics

• Airports Upgrading: Penang Intl, Langkawi Intl, Sultan Ismail Petra, Mukah and Sandakan
• Abolish tolls: Batu Tiga (Shah Alam), Sungai Rasau (Selangor), Bukit Kayu Hitam (Kedah), and Eastern Dispersal Link (Johor)
• ECRL: Port Klang – Pengkalan Kubor
• MRT2: Sungai Buloh-Serdang-Putrajaya
• High Speed Rail Project KL-Singapore
• Pangkor Island: Duty Free Status
• Digital Free Trade Zone (DFTZ): 1st phase construction in Aeropolis, KLIA

9. Capital Markets

• Duty stamp exemption for contract note of ETF and Structured Warrants (3 years)
• Tax relief for VC
• Tax deduction for angel investors in VC

10. Other

• Hiring maids directly without requiring agent
• Easy loan for Food Truck 1 Malaysia (FT1M)
• E-hailing application for registered taxi driver: RM5k grant