Some call it an exciting budget… some call it a ‘poor’ budget… some even call it the people’s budget… most call it an election budget. No matter how we call it, what does the budget means to you and me? How exactly does it impact a regular Malaysian?
I do not claim to be an expert but I think these are a few budget proposals which a regular Malaysian like you and me should know about…
For those who have purchased property before, you will know that there is a tax in the form of ‘stamp duty’ which needs to be paid. Yes, it’s a tax which the buyer needs to pay. For a property worth RM250,000, you will probably needs to pay stamp duty of about RM4,000 (this is an estimate only). The budget proposed that a 50% reduction of stamp duty for property worth not more than RM250,000 so our pocket can save about RM2,000 we purchase a property worth not more than RM250,000. Not a bad move.
Better if you are transferring properties between husband and wife. Stamp duty will be fully exempted from such transactions. Whether there will be any restrictions on the value of property transferred, yet to be known.
Next, the widely discussed abolishment of school fees and free text books for all. It seems that many claimed that the savings from this proposal is too minimal to be felt and is widely regarded as an election proposal. Indeed, this proposal will not benefit urban folks much but it does means a lot to the non-urban population. Vote winning formula? Perhaps… but then again, shouldn’t schools be totally free to begin with?
The proposal which was supposed to make us all feel very good is that EPF contributors will be allowed to withdraw balances from Account 2 to pay monthly housing instalments. Sounds like a good idea. But if you were to think properly… the government is basically allowing us… to use our own money… to pay for our own house. And we are supposed to feel thankful about it? You tell me…
For those of us who have children, there may be good news for you. Scholarships offered by the government via JPA will be increased from 5,000 to 10,000 with significant increase in allowances given to overseas students. There are a couple of JPA sponsored students who read AZAIG, but there were also a lot of AZAIG readers who failed to get a JPA scholarship recently (you know who you are). Will this really benefits your children and mine? I shall leave that to you.
I read in a blog saying that one does not need to worry about fees anymore because one of the budget proposal was a tax relief for education fees to all post-graduate studies of up to RM3,000. To put things into a better perspective… you will probably only be able to actually get a tax benefit if you earn a monthly income of perhaps… RM5,000. Even that… your savings from this relief is probably about… RM400. Again, this is an estimate. So… do you really don’t need to worry about your fees? Okay… better than nothing right?
On top of that, there is also a tax relief for purchases of sports equipment of up to RM300. The tax savings for that, assuming you are earning RM3,000 a month, will probably be about RM24. If you earn lower… then the savings will be lower lor…
One very peculiar proposals stood up amongst the rest… beginning 2008, public listed companies will be required to disclose their employment composition race and gender, as well as programmes undertaken to develop domestic and Bumiputera vendors. I wonder why.
Those were the few things which I think you should know. There was a single-tier tax system being proposed but it will be too technical to discuss here. Also, I said that there will be reduction of individual tax rate but it didn’t happen. Instead, there was a reduction of corporate tax rate which I am sure it will not affect anyone of us here. If the reduction of corporate tax benefits you, I am sure you don’t be reading blogs. As expected, GST was not announced.
The other parts of the budget are mostly about how the government is going to spend
On a related note, the mainstream newspaper gave a very brief picture about how the government ministries spend their money. Apparently, our government is a generous one, always paying premium… extra premium for stuff. To be really honest with you, I am really surprise the mainstream actually reported this.
Pictures courtesy of TheStar.
Among some of them which deserves to be highlighted was RM5,741 for a car jack worth RM50. I think I want to sell car jacks to the government. Maybe I should sell books too cause the government also purchased technical book sets worth RM417 for a whooping RM10,700. And not just 1 set… 10 sets bought! Makes us wonder how much the government will spend to buy those text books for students, don’t you think?