Updated1 Personal income tax to be reduced by 1%, Budget highlights

Written by Joseph Chin
Friday, 23 October 2009 16:16

Highlights of Budget 2010


* Government to reduce maximum individual income tax rate from 27% to 26% for chargeable income group exceeding RM100,00. Personal relief increase from RM8,000 to RM9,000 in 2010. This means that each individual taxpayer will enjoy an increase of Rm1,000 in disposable income.

* Government to allocate RM899 million for tourism industry in 2010, aims to attract more participants from UK, Japan and South Korea under the Malaysia, My Second Home programme.

* Government to speed up implementation of high-speed broadband at total cost of RM11.3 billion, of which RM2.4 billion is from government and RM8.9 billion from Telekom Malaysia.

* Government proposes individual taxpayers be given tax relief on broadband subscription fee up to RM500 a year from 2010 to 2012.

* Government to allocate RM9 billion for infrastructure, of which RM4.7 billion will be for road, bridge, water and sewerage projects and RM900 million for railways.

* Government to look into micro insurance, takaful coverage. Premiums from as low as RM20 per month for small traders, coverage from RM10,000 to RM20,000.

* Flexible brokerage sharing between stockbrokers, remisers. Flexible brokerage at 40% for remisiers. To be fully liberalised in second stage by Jan 1, 2011.

* Allow 100% foreign equity stake in corporate finance, financial planning companies from at least 30% local stake now.

* For upstream petroleum companies, income tax for assessment year 2010 based on 2009 income can be paid over five years.

* Government to impose 5% tax on gains from disposal of real property from Jan 1, 2010. However,it will be retained for gifts between parent and child, husband and wife, grandparent and grandchild. This tax exemption will also be given on disposal of residential property once in a lifetime.

* Government proposes RM50 service tax on each principal credit card, charge card, including free cards. RM25 for supplementary cards by January.

* Government to impose RM10,000 for each approved permit to open AP holders, for distribution of AP in 2010.

* Government to implement fuel-subsidy management system in early 2010, using MyKad, to ensure targeted groups will benefit.

* Government to launch scheme for EPF contributors to use current, future savings in Account Two to get higher financing to buy higher value house or additional houses.

* Government to issue 1Malaysia sukuk bonds totalling RM3 billion, for Malaysian aged 21 and above. Three-year maturity, with 5% annual rate of return

* 1Malaysia retirement scheme for self-employed, run by EPF. For every RM100 contribution, government to contribute 5%, maximum RM60.

* Personal tax relief raised to RM7,000 from RM6,000 now for EPF contribution and life insurance premiums.

* Government allocates RM400 million to extend special RM500 payment to civil servants from Grades 41 to 54 and those on mandatory retirement.*