October 23, 2009

A Layman's View of Budget 2010

Budget 2010 has been revealed by our Prime Minister this afternoon and many measures have been announced. In this article, I will focus on the measures to be implemented next year that have direct impact on the welfare and financial health of normal working people:
  1. Maximum income tax rate has been reduced from 27% to 26% for chargeable income of more than RM100,000
  2. Personal tax relief has been increased from RM8,000 to RM9,000
  3. Tax relief for broadband subscription fee up to RM500 from year 2010 to 2012
  4. 5% real property gain tax (RPGT) from Jan 1, 2010, except the house gift from parent to child, husband to wife, and grandparent to grandchild.
  5. RM50 service charge for every principal credit/charge card, including free for life card. RM25 service charge for each supplementary card from Jan, 2010
  6. RM10,000 tax for each approved permit (AP) issued to open AP holders
  7. New fuel subsidy management system by early 2010
  8. New EPF scheme to use current and future savings in Account 2 to purchase higher value house or additional house
  9. New 3 billion 1Malaysia sukuk with 5% returns for Malaysians age 21 and above
  10. 1Malaysia retirement scheme for self-employed, to be run by EPF. For every RM100 contribution, the government will subsidize 5%, up to RM60 per year, for a maximum of 5 years
  11. Netbook with free Internet subscription will be available for tertiary students for a fee of RM50 for 2 years
  12. Civil servants are eligible to apply for computer loans once in every three years and up to a maximum of RM5,000 from the government once in every five years
  13. Employees EPF contributions will be raised again to 11 per cent on a voluntary basis with immediate effect. However, from Jan 1, 2011 employees' EPF contribution will revert to 11 per cent.
  14. Personal tax relief for EPF contribution and life insurance premiums to be increased from RM6,000 to RM7,000. The 1k increase can be only use for retirement annuity insurance premiums.
  15. For tertiary students with PTPTN loan, the loan will be converted to scholarship if the students secure first class degree
  16. Local and foreign knowledge workers in Iskandar Malaysia will be subjected to only 15% income tax


giko said...

Re - The 1M'sia retirement fund for self-employed. It's RM100 p.m. not RM1,000.

5% of RM100 = RM5 X 12 mths = RM60.

What I'm cheesed off is the RM50 levied on credit/charge card! Am having 10 cards; so the logical choice is to cancel 9 cards, maybe 10 and applying for an ATM card that can be used at most places...

jutamind said...

thanks for the pointers. have made the correction and added some new observations.

as for credit cards, let's wait for further updates from the banks. who knows the banks might absorb the charges since it's very competitive in credit card segment. all the marketing costs will go to drain if consumers start to cancel their cards

giko said...

We can also lobby our MP's to reject or at least amend the proposal so that the first credit or debit card plus sub card are free and only the second card onwards be taxed the RM50 and RM25.

Credit/debit cards are a necessity these days especially for internet transactions.

OK time to email my MP.

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