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Friday, October 17, 1997
1998 Budget highlights
PROPERTY/INVESTMENT:
Thirty per cent quota on sale of condominiums of over RM250,000 to foreigners be
increased to 50%.
- Foreign interest allowed to buy two units of condominiums, with additional units subject
to having incorporate a company.
- Permanent residents allowed to buy dwellings priced below RM250,000 but above RM60,000
on condition that the spouse is a Malaysian citizen or he has applied for Malaysian
citizen status.
- Reinvestment allowance given to promote investment activities like expansion,
diversification and modernisation be restricted to increase productivity.
- Securities Commission to introduce a futures contract on ringgit that will be traded on
the Malaysia Monetary Exchange.
- SC to amend rules on protection of investors assets held by stockbroking firms.
- All broking firms must increased their capital in one year. Those without sufficient
capital to support business will have to scale down activities, merge or have their
licence revoked.
- Real property gains tax (RPGT) on non-residents to be imposed at a 5% rate if disposal
of real property takes place after the fifth year.
EDUCATION:
Government to allocate RM12.458bil for education, with emphasis on development and
upgrading of technology in teaching and educational techniques.
- Time promotion scheme for teachers will be implemented.
- Vehicle and computer loans facilities amounting to RM100mil for teachers.
- A sum of RM2.881bil allocated for operating requirement of institutions of higher
learning and increasing student population and construction of new campuses.
- A sum of RM676.5mil to be allocated for the development of infrastructure and training
of 36,902 workers and 360 instructors in industrial training institutes.
- A sum of RM119mil allocated for implementation of Smart Schools in 90 selected schools.
EXPORTS:
Companies exporting goods having 30% value-added to get income tax exemption equivalent
to 10% of the increase in export value.
- Companies exporting products having 50% value-added to get income tax exemption
equivalent to 15% of the increase in export value.
- Agriculture and service-sector companies to get one-tier income tax exemption equivalent
to 10% of the increase in export value.
- Duty on petroleum exports cut.
- A special building allowance of 10% for warehouses used for purposes of export and
re-export.
CORPORATES:
Corporate tax cut to 28% from 30%.
- Companies exporting products having 50% value-added to get income tax exemption
equivalent to 15% of the increase in export value.
- Double deduction for income tax be given to expenditure incurred on advertising locally.
TRANSPORT:
Import duties on CBU cars to increased to between 140% and 300% from between 140% and
200%.
- Import duty on CBU vans be increased to between 42% and 140% from 35%.
- Import duty on CKD vans be increased to a maximum of 40% from 5%.
- Import duty on CBU four-wheel-drive and multipurpose vehicles to be increased to between
60% and 200% from 50%, and on CKD to 40% maximum from 5%.
- Import duty on CBU motorcycles be increased to between 80% and 120% from 60%, and on CKD
to be increased to 30% maximum from 5%.
- Credit ceiling for hire purchase of passenger cars be reduced to 70% from 75% and
repayment period must not exceed five years.
CONSTRUCTION:
All imports of heavy machinery for construction sector to obtain MITI's approval.
- Import duty on construction materials to be increase to between 10% and 30%, from
between 5% and 25%.
- Import duty of 5% to be imposed on construction industry's heavy machinery and equipment
like tower cranes and forklifts.
- Import duty on dumpers and multi-purpose vehicles to be raised from between 0 and 30% to
50%.
- Import duty on special-purpose vehicles like crane lorries and concrete mixer lorries be
increased to 50% from 35%.
- Rate of initial capital allowance for imported heavy machinery be reduced to 10% from
20%.
THE HOME/PERSONAL:
Import duties on a number of consumer durables like refrigerators be increased to 30%
from 25%.
- Concessionary tax rate of five per cent on life reinsurance income.
- Fees for international travel document be increased to RM300 and RM600 from RM145 and
RM265, and fees for restricted travel document be increased to RM150 from RM60.
- Additional relief for children studying in higher institutions abroad be withdrawn.
- Tax deduction on voluntary EPF contribution be increased to 7% from 5%.
- A tax rebate of RM400 for purchase of personal computer by each family.
- Duties on leather goods, ties, jackets reduced.
HEALTHCARE:
An investment allowance of 60% be given to private hospitals to qualifying capital
expenditure incurred to establish special wards for lower-income group patients.
- Income tax deduction for individuals contribution in providing health facilities up to
RM20,000.
- A sum of RM3.494bil provided for further enhancement of standard and quality of medical
and public health services and extension of specialist services to states and districts.
DEVELOPMENT:
A RM2.08bil allocation for facilities for education, training and health.
- The XIV Commonwealth Games, education and health, poverty eradication and rural
development not to be affected by the 2% cut in government expenditure.
- A RM1bil fund will be set up to further promote development of SMIs.
- Designing and prototyping activities to given R&D incentives.
- A sum of RM400mil allocated to enable government agencies to develop information
technology and electronic government.
- Commercialisation of Research and Development activities to be further implemented.
- A sum of RM498mil allocated to build 5,200 housing units for armed forces, police,
customs, immigration officers, prison warders and government servants at KLIA.
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