KUALA LUMPUR: Malaysia’s Prime Minister Datuk Seri Najib Abdul Razak will present the government’s 2017 budget on Oct 21. Below are some items that could feature in the coming year’s budget, according to analysts’ research notes and Malaysian media reports.
Bank RHB foresees a RM100 hike in cash handouts for low-income households, bumping up the allocation to about RM6.6 billion next year in a bid to stimulate consumer spending. For 2016, it was increased by RM50 to RM1,000 per household.
The government will likely maintain the goods and services tax introduced in April 2015, at 6% to avoid any disruption to household expenses and cost of doing business, says asset management firm Affin Hwang.
Affin Hwang thinks a 1 percentage point cut to corporate tax effective, effective in 2018, will be announced. The rate was cut by 1 percentage point this year to 24%.
PERSONAL INCOME TAX
There will likely be no cut to personal income tax rates, though there may be more provisions for tax relief next year, according to Maybank Investment Bank.
Budget 2017 will likely firm up details of major infrastructure projects that have yet to take off to maintain the momentum in the sector to support growth, says Maybank IB. These would include highway and public transport projects in the peninsula and Sabah, and a timeline for the implementation of the Kuala Lumpur-Singapore High Speed Rail project.
Further cuts may be made to subsidies for daily necessities such as flour, cooking oil and cooking gas, according to RHB, though these will likely be at a gradual and moderate pace.
First-time housebuyers may have more funds to use for downpayments on properties through the Employees Providence Fund (EPF), says Affin Hwang. Second Finance Minister Johari Abdul Ghani said the government is studying a proposal to increase the allocation for funds available for low-cost housing purchases under the EPF to 40% from 30% of a savings account.
RHB expects the First House Deposit Financing scheme to be extended to more buyers. It was introduced this year with an allocation of RM200 million, aimed at helping up to 30,000 first-time house buyers with downpayments.
SUPPORT FOR SMALL BUSINESS
A cabinet minister has said there might be more incentives for small and medium enterprises (SMEs). He said SMEs contributed 35.9% to GDP in 2015, and account for over 98% of all businesses nationwide.
CAR EXCISE DUTY CUTS
Chinese newspaper Sin Chew Daily said the government is mulling an exemption for first-time car buyers from excise duties for local and imported small car models assembled in Malaysia, with projected savings of up to RM2,000.