Download From Year of Assessment 2016 Tax relief

BUDGET
2016
Chua Tia Guan
25.10.2015
Corporate & Individual Income Tax
RM (m)
2012
2013
2014
2015
2016 forecast
Companies
51,288
58,175
65,240
68,320
74,381
Individual
22,977
23,055
24,423
28,155
30,266
Total
74,265
81,230
89,663
96,475
104,647
N/A
6,965
8,433
6,812
8,172
9.4%
10.4%
7.6%
8.5%
Increase
Growth
2
Corporate & Individual Income Tax
3
Income tax
changes affecting
Companies
Tax incentives
Reinvestment allowance (RA)
Current
•60% qualifying project for 15 years beginning
from 1st year RA claimed
Proposed
•Special RA for companies for 3 years after
expiration of 15 years
From Year of Assessment 2016 to 2018
6
Increased export allowance
Current
Exemption equivalent to
•10% value of increased exports with ≥ 30% value
added
•15% value of increased exports with ≥ 50% value
added
Proposed
For SME :
•10% value of increased exports with ≤ 20% value
added
•15% value of increased exports with ≤ 40% value
added
From year of assessment 2016 to 2018
7
R&D project
Current
•Double deduction on R&D expenditure subject to
IRB approval
Proposed
•SME – double deduction up to RM50,000 per year
without approval requirement
From year of assessment 2016 to 2018
8
Food production projects
Current
•Vegetables, fruits, kenaf, herbs, spices, cows,
buffaloes, goat, sheep, acquaculture , deep sea
fishing
•Investment in subsidiary is given a tax deduction
•New - 100% income tax exemption for 10 years
•Expansion - 100% income tax exemption for 5
years
9
Food production projects
Proposed
•Extension of 5 years
•Scope widen to include planting of coconuts,
mushrooms & cash crops, rearing of deer,
seaweed cultivation, rearing of honey, animal feed
crops
From 1 Jan 2016 to 31 Dec 2020
10
Tour operating companies
Current
•100% income tax exemption for tour packages
within Malaysia by ≥ 1,500 local tourists per year
•100% income tax exemption for tour packages to
Malaysia by ≥ 750 inbound tourists per year
Proposed
•Extension of 3 years
From year of assessment 2016 to 2018
11
Establishment of Independent Conformity
Assessment Bodies (ICAB)
ICAB – Co that offers independent conformity
assessment services to test products, materials,
systems or services for conformance to
international specifications or safety standards &
other conformities
Previously, labs testing medical devices given tax
incentive.
12
Establishment of Independent Conformity
Assessment Bodies (ICAB)
Current
•Nil
Proposed
•New ICAB – 100% statutory income tax exemption on
qualifying activities for 5 years; or
•New ICAB – Investment tax allowance (ITA) of 60% on
qualifying capital expenditure for 5 years offset against 100%
of statutory income
•Existing ICAB – ITA of 60% on qualifying capital expenditure
for 5 years offset against 100% of statutory income
From 1 Jan 2016 to 31 Dec 2018
13
Establishment of Independent Conformity
Assessment Bodies (ICAB)
Qualifying Sectors
Eligible activities
• Machinery & equipment
• Electrical & electronics
• Chemicals
• Aerospace
• Medical devices
• Fresh & processed food
• Testing laboratories
• Calibration
• Certification
• Inspection
• Good laboratory
14
Establishment of Independent Conformity
Assessment Bodies (ICAB)
ICAB accreditated by :
• Department of Standards Malaysia
• Accreditation bodies recognised by International
Laboratory Accreditation Cooperation
• International Accreditation Forum
• OECD Good Laboratory Practice Mutual
Acceptance Data
15
Withholding tax of 10%
Current
•Withholding tax of 10% on profit distribution
from listed REITs for foreign institutional
investors & individuals
Proposed
•Extension of 3 years
From 1 January 2017 to 3 December 2019
16
Funding
SME Funding
Shariah-compliant SME Financing Scheme
•RM1billion
•Subsidy of 2% of financing profit rate
SME Blueprint
•RM107m – funds for entities for business development
Entrepreneurs Acceleration Scheme, and SME
Capacity and Capability Enhancement Scheme
•RM60million
18
SME Funding
SME Technology Transformation Scheme
•RM200million under SME bank
•Softloan at 4% interest
Small Retailer Transformation Programme (TUKAR)
& Automotive Workshop Modernisation (ATOM)
•RM18million
19
Other Funding
MATRADE
•RM235 million
•1Malaysia Promotion Program
•Service Export Fund
•Export Promotion Fund
IBS Promotion Fund
•RM500million – Industrial Building System
Agriculture
•RM450million
•High impact projects
•Fruit & vegetable cultivation
•Matching grants for herbal products, fish cage farming20
GST changes
GST update
Number of registrants – by Customs
Administration
22
GST update
Number of registrants – by Entity
23
GST update
Number of registrants – by Sector
24
Zero rated
Food items - addition
Proposed
•Organic-based milk for infant & children
•Soy bean based milk for infant & children
•Dhal bean include chickpeas and green & white bean
•Vegetables include lotus root and water chestnut
•Spices include mustard seeds
•Sugar include jaggery powder
•Noodle products include “mi kolok”
From 1 January 2016
25
Zero rated
Drugs / medicine addition
Proposed
•All types of Controlled Drugs in Poison Groups A,B, C
& D under Poisons Act 1952
•Expansion of Over the Counter Medicine from 1,013
brand of drugs to 1,105
•Medical devices under NEML expanded from 125
brands to 128
From 1 January 2016
26
Zero rated
Domestic air transport - addition
Proposed
•Domestic air transportation for passengers within and
between Sabah, Sarawak & Labuan
From 1 January 2016
27
GST special scheme
Flat rate scheme - farmers
Current
•Threshold for registration- RM100,000
Proposed
•Threshold for registration- RM50,000
From 1 January 2016
28
GST incentive – GST relief
Reimportation of goods temporarily exported for
promotion, research or exhibition
Proposed
•Relief from GST payment
From 1 January 2016
29
GST incentive – GST relief
Reimportation of goods temporarily exported for
rental & lease
Proposed
•Relief from GST payment
From 1 January 2016
30
Income tax
changes affecting
Individuals
Review of income tax rate
Chargeable income
(RM)
Current Tax Rate
(%)
Proposed Tax Rate
(%)
1 – 5,000
0
0
5,001 – 20,000
1
1
20,001 – 35,000
5
5
35,001 – 50,000
10
10
50,001 – 70,000
16
16
70,001 – 100,000
21
21
100,001 – 250,000
24
24
250,001 – 400,000
24.5
24.5
400,001 – 600,000
25
25
600,001 – 1,000,000
25
26
> 1,000,000
25
28
From Year of Assessment 2016
32
Review of income tax rate
Chargeable income
(RM)
Proposed Tax
Rate
(%)
Chargeable income
(SGD)
Singapore Tax
Rate
1 – 5,000
0
1 – 5,000
0
5,001 – 20,000
1
5,001 – 20,000
0
20,001 – 35,000
5
20,001 – 30,000
2
35,001 – 50,000
10
30,001 – 40,000
3.5
50,001 – 70,000
16
40,001 – 80,000
7
70,001 – 100,000
21
80,001 – 120,000
11.5
100,001 – 250,000
24
120,001 – 160,000
15
250,001 – 400,000
24.5
160,001 – 200,000
17
400,001 – 600,000
25
200,001 – 320,000
18
600,001 – 1,000,000
25 to 26
> 320,000
20
> 1,000,000
25 to 28
From Year of Assessment 2016
33
Tax relief
Spouse relief
Current
•RM3,000 where spouse has no income
Proposed
•RM4,000 where spouse has no income
From Year of Assessment 2016
34
Tax relief
Alimony to former wife
Current
•RM3,000
Proposed
•RM4,000
From Year of Assessment 2016
35
Tax relief
Parental care relief
Current
•RM5,000 for medical treatment & care of
parents
Proposed
•RM1,500 each* for parental care
From Year of Assessment 2016 until 2020
36
Tax relief
Parental care relief
* Conditions
•No claim for parents’ medical care relief
•Parents are natural parents or foster parents by
law subject to a maximum of 2 parents
•Parents aged 60 years and above
•Parents reside in Malaysia in current year of
assessment; and
•Parents have an annual income <RM24,000 per
annum each
37
Tax relief
Relief for children below 18 years old
Current
•RM1,000 for each child
Proposed
•RM2,000 for each child
From Year of Assessment 2016
38
Tax relief
Relief for children studying at tertiary level
Current
•RM6,000 for each child
Proposed
•RM8,000 for each child
From Year of Assessment 2016
39
Tax relief
Relief on fees for tertiary education
Current
•RM5,000
•Certificate/Diploma/Degree : law, accounting,
Islamic finance, vocational, technical, industrial,
scientific & technological skills or qualification
•Master / Doctorate : all fields
Proposed
•RM7,000
From Year of Assessment 2016
40
Tax relief
Relief on contribution to SOCSO
Current
•Nil
Proposed
•RM250
From Year of Assessment 2016
41
Other changes
Stamp duty
Exemption on revived abandoned housing
Current
•Instruments of loan agreement for financing
•Instruments of transfer of title
•From 1 January 2013 to 31 December 2015
Proposed
•Extension of 2 years
Effective from 1 Jan 2016 to 31 Dec 2017
43
Stamp duty
Exemption on Shariah financing
Current
•20% exemption on housing financing instruments
•From 2 September 2006 to 31 December 2015
Proposed
•Extension of 2 years
Effective from 1 Jan 2016 to 31 Dec 2017
44
Thank
You
Vision 2020
= RAKYAT + quality of life
High Income, Inclusiveness, Sustainability
11th MP
= Anchoring Growth on People
• Enhancing inclusiveness towards an equitable
society
• Improve well being for all
• Accelerate human capital development for an
advance nation
• Pursuing green growth sustainability and resilience
• Re-engineering economic growth for great prosperity
Budget 2016
Prospering The Rakyat
46
Financial target of 2020
2015
10,196
2016
??
2020
USD15,690
Budget deficit
3.2%
3.1%
0%
Government debt
54%
??
45%
GNI per capita
(USD)
Source : 11MP & 2016 Econ Rpt
47
Rationalising operating expenditure
Billion (RM)
Operating expt
2010
151b
2016
215b
2020
290b
Gross Dev expt
74%
53b
26%
81%
50b
19%
86%
48b
14%
Total Budget
204b
265b
337b
Source : 11MP & 2016 Econ Rpt
• Value for money
• Open tender --- eProcurement, e-Bidding
• Outcome based budgeting :
–operating + development
48
Rationalising public sector for
greater productivity & performance
Billion (RM)
Emolument
&pension, etc
Gross Dev expt
Total Budget
2010
58b
2016
90b
2020
120b
28%
53b
26%
204b
34%
50b
19%
265b
36%
48b
14%
337b
Execution is the key :
• Reducing overlapping roles
• Rightsizing the public service
• Exit policy for under performers
49
Lower education allocation for 2016
million (RM)
Education
& training **
2014
4,928
2015
5,629
2016
4,691
-23.5%
14.2%
-16.7%
** development expenditure
50
Fiscal discipline and reforms
Reliance
•
•
•
•
Income
Tax
GST
Oil
revenue
Diversified sources of income
Resilience of economy
Preserve the value of ringgit
Credit rating
51
OIL REVENUE
60,000
55,956
50,000
40,000
35,529
30,000
25,331
20,000
10,000
0
2014
2015
2016 (F)
OIL REVENUE (PITA + DIV) (RM million)
Source: Economic Report 2015/2016
52
SST/GST REVENUE
39,000
40,000
34,635
35,000
30,000
25,000
20,000
17,216
15,000
10,000
5,000
0
2014
2015
2016 (F)
SST/GST Revenue (Sales tax, Service tax & GST) (RM million)
Source: Economic Report 2015/2016
53
OIL + SST/GST REVENUE
80,000
73,172
70,164
70,000
64,331
17,216
60,000
34,635
50,000
39,000
40,000
30,000
55,956
20,000
35,529
25,331
10,000
0
2014
2015
OIL REVENUE
2016 (F)
SST/GST (RM million)
Source: Economic Report 2015/2016
54
GST collection & Oil revenue
2014
2015
Actual Brent
(USD99)
Budgeted
Brent
(USD100)
2016
Rev(ER) Brent
(USD50)
Budgeted
Brent (USD48)
RM Million
Oil revenue
66,274
62,428
43,872
31,718
PITA
26,956
25,600
9,529
9,331
Dividend
29,000
27,000
26,000
16,000
GST/SST
17,216
31,608
34,635
39,000
SST
17,216
*4,608
*7,635
-
GST
-
**27,000
**27,000
39,000
Total
83,490
94,036
78,507
70,718
N/A
10,546
-4,983
-7,789
Net revenue
difference
(y-o-y)
* SST (Jan – Mar 2015) ** GST (Apr – Dec 2015)
55
RM5.9 b
Category
Household
Individual
e-Kasih
Unit
Monthly
income
BR1M
value
Payment
frequency
≤ RM3,000
RM1,000
(2015:
RM950)
Monthly
RM3,001 –
RM4,000
RM800
(2015:
RM750)
Monthly
≤ RM2,000
RM400
(2015:
RM350)
RM400 January
≤ RM1,000
RM1,050
Monthly
4.7 m
2.7 m
56
High income USD15k = quality of life ?
RM
2020
2014/15
Labour
productivity
92,300
77,100
Household
income
M40
B40
mean
mean
monthly monthly
9,970
5,270
5,662
2,537
• Wages rise faster than productivity
• Purchasing power
57
Global Labour Productivity Frontier
US 70,242
HK 65,598
Spore 49,464
Korea 46,098
Malaysia 25,090
Source : Productivity Report 2014/2015
58
B40
SL1M
Up-skill
Re- skill
Multi-skill
TVET
PLWS
59
Vision 2020
= RAKYAT + quality of life
High Income, Inclusiveness, Sustainability
11th MP
= Anchoring Growth on People
• Enhancing inclusiveness towards an equitable
society
• Improve well being for all
• Accelerate human capital development for an
advance nation
• Pursuing green growth sustainability and resilience
• Re-engineering economic growth for great prosperity
Budget 2016
Prospering The Rakyat
60
Financial target of 2020
2015
10,196
2016
??
2020
USD15,690
Budget deficit
3.2%
3.1%
0%
Government debt
54%
??
45%
GNI per capita
(USD)
Source : 11MP & 2016 Econ Rpt
61
Rationalising operating expenditure
Billion (RM)
Operating expt
2010
151b
2016
215b
2020
290b
Gross Dev expt
74%
53b
26%
81%
50b
19%
86%
48b
14%
Total Budget
204b
265b
337b
Source : 11MP & 2016 Econ Rpt
• Value for money
• Open tender --- eProcurement, e-Bidding
• Outcome based budgeting :
–operating + development
62
Rationalising public sector for
greater productivity & performance
Billion (RM)
Emolument
&pension, etc
Gross Dev expt
Total Budget
2010
58b
2016
90b
2020
120b
28%
53b
26%
204b
34%
50b
19%
265b
36%
48b
14%
337b
Execution is the key :
• Reducing overlapping roles
• Rightsizing the public service
• Exit policy for under performers
63
Lower education allocation for 2016
million (RM)
Education
& training **
2014
4,928
2015
5,629
2016
4,691
-23.5%
14.2%
-16.7%
** development expenditure
64
Fiscal discipline and reforms
Reliance
•
•
•
•
Income
Tax
GST
Oil
revenue
Diversified sources of income
Resilience of economy
Preserve the value of ringgit
Credit rating
65
OIL REVENUE
60,000
55,956
50,000
40,000
35,529
30,000
25,331
20,000
10,000
0
2014
2015
2016 (F)
OIL REVENUE (PITA + DIV) (RM million)
Source: Economic Report 2015/2016
66
SST/GST REVENUE
39,000
40,000
34,635
35,000
30,000
25,000
20,000
17,216
15,000
10,000
5,000
0
2014
2015
2016 (F)
SST/GST Revenue (Sales tax, Service tax & GST) (RM million)
Source: Economic Report 2015/2016
67
OIL + SST/GST REVENUE
80,000
73,172
70,164
70,000
64,331
17,216
60,000
34,635
50,000
39,000
40,000
30,000
55,956
20,000
35,529
25,331
10,000
0
2014
2015
OIL REVENUE
2016 (F)
SST/GST (RM million)
Source: Economic Report 2015/2016
68
GST collection & Oil revenue
2014
2015
Actual Brent
(USD99)
Budgeted
Brent
(USD100)
2016
Rev(ER) Brent
(USD50)
Budgeted
Brent (USD48)
RM Million
Oil revenue
66,274
62,428
43,872
31,718
PITA
26,956
25,600
9,529
9,331
Dividend
29,000
27,000
26,000
16,000
GST/SST
17,216
31,608
34,635
39,000
SST
17,216
*4,608
*7,635
-
GST
-
**27,000
**27,000
39,000
Total
83,490
94,036
78,507
70,718
N/A
10,546
-4,983
-7,789
Net revenue
difference
(y-o-y)
* SST (Jan – Mar 2015) ** GST (Apr – Dec 2015)
69
RM5.9 b
Category
Household
Individual
e-Kasih
Unit
Monthly
income
BR1M
value
Payment
frequency
≤ RM3,000
RM1,000
(2015:
RM950)
Monthly
RM3,001 –
RM4,000
RM800
(2015:
RM750)
Monthly
≤ RM2,000
RM400
(2015:
RM350)
RM400 January
≤ RM1,000
RM1,050
Monthly
4.7 m
2.7 m
70
High income USD15k = quality of life ?
RM
2020
2014/15
Labour
productivity
92,300
77,100
Household
income
M40
B40
mean
mean
monthly monthly
9,970
5,270
5,662
2,537
• Wages rise faster than productivity
• Purchasing power
71
Global Labour Productivity Frontier
US 70,242
HK 65,598
Spore 49,464
Korea 46,098
Malaysia 25,090
Source : Productivity Report 2014/2015
72
B40
SL1M
Up-skill
Re- skill
Multi-skill
TVET
PLWS
73