Malaysia Budget 2019



  • Hi all, Malaysia budget 2019 had been released a few days ago! The budget 2019 can be found from the link below:

    https://www.sc.com.my/wp-content/uploads/eng/html/resources/budget2019/bs19.pdf

    Below are the highlights, kindly comment for any misstatement or addition of point.

    GENERAL
    1.Expected GDP growth rate at 4.8% at 2018 and 4.9% at 2019. (point 12 and 13)

    EDUCATION

    1. Education to get 19% of budget (RM60.2 billion). (point 115)

    2. Donation to IPTA registered with MoE and natinal schools for the purpose of upgrading infrastucture will be tax exempted starting 1 Janaury 2019. (point 116)

    3. In respect of PTPTN: (point 126)

      • progressive loan repayment schedule (2% - 15% of monthly income depending on income level). Only apply to those with monthly income >RM1000.
      • tax relief for companies that help settle all remaining loans of their employees for year ending 2019 (another way for tax avoindance and earning extra income?)
      • tax relief for SSPN increased to RM8,000
      • writing off debt of those who are 60 yrs old and above with monthly income <RM4,000.
    4. RM100 million to be allocated to the athletes for Tokyo Olympic 2020 and RM10 million to MDEC for E-Sport (yay!). (point 128 and 129)

    REIT/PROPERTY

    1. To launch airprot REIT (time 2 diversify!). (point 40 and 41)
    2. RPGT for houses. Tax on citizens 5% and on companies and foreigners 10% after 5 year holding period (previously 0% and 5%). (point 58)
    3. Low cost, low medium cost and affordable housing below RM200,000 will be tax exempted for Malaysian citizen after 5 years holding period. (point 58)
    4. Stamp duty for transfer of property >RM1 million will be 4%, previously 3%. (point 59)
    5. For first time home buyer : (point 99, 100, 104 and 105)
      • until Dec'20, stamp duty exemption upto RM5,000 for residentual property valued <RM500,000.
      • from Jan'19 to Dec'20, individual earning <RM2,300/month purchasing affordable home with value <RM150,000 is eligible for concessionary financing rate as low as only 3.5% p.a. (point 99)
      • individual with household income <RM5,000, Cagamas Berhad will provide mortgage guarantees for borower to obtain higher financing.
      • from Jan'19 to June'19, exemption of stamp duty priced between RM300,001 - RM500,000
      • P2P property crowdfunding as an alternative source of financing, expected to start at first quarter of 2019 (will it be available in FS?).

    BUSINESS

    1. Credit system for Sales Tax deduction starting 1 January 2019 (clarificatipn anyone?). (point 45)
    2. Imported services willl be subjected to Service Tax starting 1 January 2019. (point 47)
    3. Tax relief (ie Capital allowance c/f, reinvestment allowance) and carrying forward business losses can only be carried forward for 7 years (need more clarification for treatment losses pre-2019). (point 54)
    4. Employee with age >60, E'yer and E'yee EPF contribution reduced to 4% and 0%. (point 77)
    5. Additional tax deduction for employment of employee aged >60 and ex-convicts upto monthly salary of RM4,000 each. (point 77 and 78)
    6. RM2 billion to SJPP to provide guarantee upto 70% for business that wish to invest in automation and modernisation. (point 145)
    7. SME tax rate for the first RM500,000 chargeable income reduced to 17%. (point 157)

    SST and Tax Related (that's not mentioned elsewhere)

    1. Special Voluntarily Disclosure Programme for disclosure of previously unreported income with reduced penalty rate: (point 50 to 52)
      • Now til March 2019 10% of tax payable
      • Apr 2019 to Jun 2019 15% of tax payable
      • After Jun 2019 (programme ended), 80% to 300% of tax payable
    2. Inland Revenue Board to investigate ostentatious lifestyle not in line with income. (point 53)
    3. Tax exemption for money market wholesale fund to end 31.12.18. (point 60)
    4. Proposed 40 sen/l sugar tax on drinks to manufacturer starting April 2019. (point 94)
    5. Foreign worker levy, who served 10 yrs or more, for agriculture and plantation reduced from RM10,000 to RM3,500 pa. (point 164)
    6. Pulau Pangkor and Penang's Swettenham Pier to be duty free. (point 174)
    7. Combine tax relief for insurance and EPF are now seperated @ RM4,000 for EPF and RM,3000 for life insurance premium/takaful. (point 88)

    B40 HOUSEHOLD

    1. Bantuan Sara Hidup starting January 2019: (point 65)
      • Household with monthly income RM2,000 (receiving RM1,000)
      • Household with monthly income RM2,001-RM3,000 (receiving RM750)
      • Household with monthly income RM3,001-RM4,000 (receiving RM500)
    2. Household with monthly income <RM4,000, for child less than 18 yrs old or disabled, there will be additional RM120 per child (upto 4 children).(point 66)
    3. EPF i-Suri for housewives under e-Kasih programme. RM40/month into the wives', who are beneficiaries of e-Kasih programme, EPF account for husband who contributed at least RM5/month (point 68)
    4. B40 Health Protection Fund to provide free protection against top 4 critical illness upto RM8,000 and hospitalisation income of RM50/day upto 14 days p.a. starting Jan'19. (point 86)
    5. Stamp duty waived for Tenang Insurance products from Jan'19 to Dec'20. (point 87)
    6. Health Screening Programme (PEKA) for individual age >50 in B40 households. (point 90)

    OTHERS

    1. Casino duty 35% and Jackpot duty 20% on gross collection. (point 62)
    2. Increase in annual casino and machine dealer's license fees. (point 62)
    3. Increased number of locations of no-smoking zone from January 2019. (point 95)
    4. 7 day leave for religious trips. For both Muslims and non Muslims (for people workig under Gov, need clarification).(point 81)
    5. Min wage set at RM1,100 starting 2019.(point 82)
    6. No toll hike for 2019. (point 113)
    7. No toll for motorcycle @ Penang Bridges (both) and Second Link inJOhor. (point 113)
    8. Airport Departure tax RM20 to asean, RM 40 to other countries from June 2019.No departure tax for domestic travel. (point 57)
    9. Government will set up Co-Investment Fund to invest in Equity Crowdfunding and P2P Financing. (point 136)
    10. Petrol subsidy for car (<1500cc) and motorcycle (<125cc). Beneficiaries will receive subsidy of at least RM0.30/l upto 100L (car) and 40L (motorcycle), expected to commence on second quarter of next year (not applicable for owner with multiple cars). (point 69)


  • Was wondering if anyone would like to share their view on Budget 2019. I'm particularly interested in the property P2P! :D


  • Contributor

    Nice. Thanks for sharing @Lipozami
    Camping here to see what others think. I don't have a good idea about this anyway


  • Community Manager

    @lipozami Thanks so much for breaking it down into bite-sized pieces of info. Digesting the points right now!

    Am also particularly stoked for Malaysia's economic growth from the other side of the bridge! ;)

    Anyone else interested in property P2P? First quarter of 2019 will arrive in no time!


  • Community Manager

    Also, world's first airport REIT! Very interesting.



  • @kaeley-wn

    Going forward, the airport REIT would be able to raise funds publicly either by issuing new REIT units or via borrowings in order to fund the improvement and expansion of airports, especially those facing overcapacity, he noted.

    “This financial structure will significantly reduce the government's debt burden to fund all of these projects on its own while maintaining MAHB as an asset-light operator not bogged down by heavy capital investments and debt,” the minister said.


  • Contributor

    This is a very adventurous and a little over ambitious budget aiming to please the Malaysian at large but at the same time they are trying to reduce the debts created by the previous government.

    I would prefer to put some of the initiatives as a long term action plans with the first priorities given to education, military and trade.

    The budget is looking at the right direction of reducing the cost of business which will benefit the business community at large.

    At the same time they are looking at the welfare of the people while it is great, this can be staggered or it will cause strain to the already financially weak government

    Overall it is a great budget



  • I am surprised to see P2P in our Budget. Our new government sure gets innovative in this Budget.

    http://www.theedgemarkets.com/article/property-crowdfunding-platforms-can-solve-housing-problems

    At this stage, I am still skeptical how this can benefit house buyers. For P2P investors, this is certainly a promising development.



  • Malaysia Airports falls 12% after govt proposed airport REIT :o

    http://www.theedgemarkets.com/article/malaysia-airports-falls-12-after-govt-proposed-airport-reit



  • @bendahara
    Agreed. Considering it is a new government, I think they got no choice but to cater for the people's expectation as well as the promise they made before election. Their approach based on their budget seems ok so far.

    @maybewei
    Time to sapu? xD since the value dropped, 52 weeks low now. But what do you think? The drop is due to market misinterpretation of the AIrport REIT or due to something else?

    @kaeley-wn
    Welcome :D Airport REIT sure sound interesting, looking forward to it honestly >< Hopefully by that time will have some bullet. Btw, the property P2P is done by another entity or will FS provide such product too? :D

    @jonhan
    Welcome~

    @k555
    I'm keen of the property P2P too but I really wonder how will it be approached as conventional house loan is much lower than P2P loan. For equity crowdfunding, how will the investor benefit from it? :/


  • Contributor

    @k555
    They announced the details.

    1. House buyer only need to pay 20%.
    2. The remaining 80% will be funded by crowdfunding.
    3. House buyer will stay for 5 years WITHOUT any mortgage monthly installment.
    4. At the end of 5th year, house buyer need to make decisions
      a. refinance and assume the balance 80%
      b. sold the house and split the sale value between the buyer, crowdfunder and developer.

    For crowdfunding investor, he/she will make 5%/annum during the 5yrs tenure.



  • Hi all,
    Wow, Someone already come out with a detailed analysis. Happy reading and analyzing !

    https://klse.i3investor.com/m/blog/FundMyHomeP2P/181077.jsp


  • Contributor

    @k555 this is great. thanks for sharing.
    looks like malaysia govt is putting more focus on alternative finance industry. good news!



  • @k555

    That's actually a nice article O.o Learn alot, really wish I have the extra bullets T^T



  • @lipozami said in Malaysia Budget 2019:

    Petrol subsidy for vehicle owner (<1500cc). Beneficiaries will receive subsidy of at least RM0.30/l upto 100L (car) and 40L (motorcycle), expected to commence on second quarter of next year (not applicable for owner with multiple cars). (point 69)

    Yikes, need to ask my dad to change owner to me?
    What will be the disadvantages for changing of ownership? No claim bonus is gone? Processing fees?
    Though, RM30/month x 2 cars is not much



  • @lipozami said in Malaysia Budget 2019:

    That's actually a nice article O.o Learn alot, really wish I have the extra bullets T^T

    Hmm, after reading the article, I think it's risky for investors too especially if property price does not appreciate by 20%



  • @sum

    @sum said in Malaysia Budget 2019:

    @lipozami said in Malaysia Budget 2019:

    Petrol subsidy for vehicle owner (<1500cc). Beneficiaries will receive subsidy of at least RM0.30/l upto 100L (car) and 40L (motorcycle), expected to commence on second quarter of next year (not applicable for owner with multiple cars). (point 69)

    Yikes, need to ask my dad to change owner to me?
    What will be the disadvantages for changing of ownership? No claim bonus is gone? Processing fees?
    Though, RM30/month x 2 cars is not much

    Processing fee is just bout RM100 if I'm not wrong. But the amount might differ if you asked another representative to help with the procedures.

    The highest cost maybe the lost of NCB. But I'm unsure if the main driver can still be put under your dad's name after the change of ownership. If yes, then the NCB would still retain. You may consult your insurance agent on this matter though.


  • Emergent

    @k555 said in Malaysia Budget 2019:

    Hi all,
    Wow, Someone already come out with a detailed analysis. Happy reading and analyzing !

    https://klse.i3investor.com/m/blog/FundMyHomeP2P/181077.jsp

    The risk for homebuyer not proportionate. Is that fair?

    And the developer. The entity with most money (compared to Investors and Homeowners) gets the most out of this. Is this a scheme to benefit the rich?!



  • @lipozami better wait for MOF / MOT to come out with the guidelines... otherwise, most of the initiatives while it is welcoming... needs more clarification


  • Contributor

    @Kenneth yes agree, it is all very vague now. And looks too good to be true for some points. Better not jump into anything yet.

    @jomni haha @Adrian-Sim mentioned fund my home is basically structured to give institutional investors a cushion using retail money. he will be best to elaborate on this I think.



  • @jonhan hi sorry! Just got back from a trip haha. I'm pretty sure I read it in their tnc somewhere, lemme find come morning



  • @sum hi, there will be risk, but I can think some of issue that could potentially offset the risk. One is myr appreciating against sgd or usd or other currency. This could further drive down the cost of living and cost of building the property. Maybe more but I can't see it so far.
    Another one is KL-sg high speed railway. Once it is done. I believe u could potentially see that those properties appreciates rapidly.



  • @jomni if only the house renter can make full use of this 5 years...




  • Contributor

    @adrian-sim Nice, thanks for sharing. Btw, are you participating in this?


 

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