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FEDERAL BUDGET 2000
BUDGET 2020
to strengthen foundation for economic achievement and people's
wellbeing
Economic performance
The recovery of our economy was made sooner than expected largely
due to domestic activity and the stringent measures taken by the
government and the private sectors to cut cost and to stimulate
economic growth.
Amidst the hardship and suffering experienced by Malaysians as
a result of these measures, it is worth the effort as indicated
by the statistics below :
- We have a trade surplus for the past 22 months up to August 1999.
- Our inflation rate decreases to 2.1% in September 99 down by 4.1
% in June 98
- Job vacancies increased to 10,767 in September 1999 up from 4244
in October 1998
- Unemloyment rate in 1999 decreases 1% to 3% compared to 1998
- EPF contributors increased by 1 million in 1999 with the monthly
contribution reaching RM1.3 billion compared to RM1.2 billion
in 1998
- Registration of new companies went up by 50% to 20,350 in the
first 3 quarters of 1999
- Loans approved by banks has also increased by 75% valued at RM4.8
bilion ringgit in 1999 compared to that of 1998.
Continue to revitalise economic growth
More money for us in 2002. The reduction in income tax is welcome
news for all.
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Personal tax incentive
- Personal income tax is reduced by 1% across the board from 30%
to 29%. Personal tax relief is also increased from RM5,000 to
RM8,000
- Single persons earning RM1,400 or less and married individuals
earning RM2,100 or less will not be taxed
- Corporate Tax Incentive
- Restriction on payment of dividends to an amount not exceeding
the after-tax profit of the financial year or not exceeding the
average dividend declared in respect of the two financial years
immediately preceeding that financial year is abolished.
- Income tax rates of Cooperatives is reduced by 1%
- Unit trusts sponsored by the federal or State governments to be
given company income tax exemptions for the year of assessment
2000 and 2001.
- The period of income tax exemption given to tour operating companies
handling at least 500 foreign tourists or 1,200 domestic tourists
to be extended to the year 2001
- To encourage mergers of insurance and stockbroking firms, 50%
of accumulated lossess of acquired insurance and stockbroking
firms will be allowed as deduction to acquiring entity in the
form of tax credit to be utilised within 2 years.
- Stamp duty and real property gains tax be granted to stockbroking
companies that undergo mergers exercises from 30 October 1999
- 31 Dec 2000
- For insurance companies, stamp duty and real property gains tx
to be exepted on instrument s used in the securisation of assets
in efforts to develop bond market.
Lower cost of doing business
Cheaper prices for 179 food categories of food
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The exemption period of import or sales tax on selective spares
and consumables is extended to Dec 31, 2000.
- Freight cost from Sabah and Sarawak to Peninsular Malaysia to
be given double deduction
- The classification and rate for annual capital allowance for plant
and machinery to be reduced from 16 to 3 classifications with
rates of 10%, 14 % and 20%
Import duties
- Import duties on 43 categories of food products is abolished and
136 other categories to be reduced
- Import duties reduced on 305 products to between 0-20 % from 5-30%
Strengthen competitiveness and resilience
- A think tank modelled after The National Economic Action Council
to formulate long term strategies will be established.
Strengthen banking system
- Interest income from growth in net lending of 8% will not be taxed
if the bank achieves growth in net lending of 10% or more in productive
sectors for the year 2000.
- Interest in suspense for the year 2000 is allowed full deduction
for company income tax.
- To impose only one stamp duty on banking instruments for Islamic
banks to make it more attractive for costumers
- Stamp duty incurred in debt restructuring committee and Pengurusan
Danaharta Nasional Berhad will be exempted and all expenses incurred
in that restructuring is allowed a deduction in corporate income
tax
- RM200 million venture capital fund to be set up to finance hi-tech
projects and Bank Negara and two commercial banks will provide
RM300 million to finance venture companies.
The Tourism Industry
- To further develop the tourism industry, a total of RM240.5 million
is set aside for development projects and promotional activities.
- To supplement exhibitions facilities, Sultan Abdul Aziz Shah Airport
in Subang will be transformed into an International Trade and
Exhibition Centre - ITEC.
Healthcare
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| RM908 million for the upgrading and completion of medical facilities |
Rural Healthcare programmes to benefit more people where medical
facilities are not easily available |
- An additional RM908.2 million is allocated for the completion
and upgrading of medical facilities
- 3,300 new posts will be created and 1,053 vacancies will be available
for public health service
- Relief on health and education insurance premuim be increased
to RM3,000 from RM2,000
Civil Service
- Basic salary increase for civil servants by 10% from January 2000
- Government servants will receive one month's bonus or minimum
RM1,000.00
- The Housing Allowance for lower income government servants will
increase by 50%
- Conditions for Government servants to obtain housing loan will
be relaxed:
- age limit of 25 years removed
- Loan eligibility up to one year if confirmed
- allowed to borrow balance of entitled amount if earlier loan
is settled.
- allowed to use balance for renovation after five years of purchase
Enhancing growth of Bumiputera Contractors and other Entrepreneurs
- RM106.1 million will be allocated for the purchase of business
premises in strategic locations to be rented to Bumiputera entrepreneurs.
- Bumiputera contractors will be given priority to implement government
development projects. To help them on this, Bank guarantee is
to be replaced with performance bonds and advance payment of 15
% is allowed. Payment of 50% will be made within 14 days after
the claim is received.
- The government will set up RM300 million entreprenuer rehabilitation
fund II to assist small businessmen.
The National budget 2000 ... What's in store for all of us
The National Budget 2000 will continue with its pragmatic approach
in strengthening the economic recovery. The thrust of the Budget
strategy will be to:
A. Continue recovery by revitalising economic growth to that of
its growth potential
B. Strengthen the economy's competitiveness and resilience to
external risks.
C. Transform the service sector into a lead economic growth sector
and at the same time promote the growth of the agricultural sector
D. Enhance human resource development through the improvement
of skill and knowledge
F. Extend social programmes that promote the people's well being
and the environmental preservation. |
