Budget 2016 Malaysia was tabled on October 23, 2015, it was based on Brent oil price assumption of US$48 (RM204) per barrel, and estimated a revenue of RM225.7 billion for 2016. The objectives include to achieve a 3.1% fiscal deficit target and to hit a 4% to 5% Gross Domestic Product (GDP) growth this year.
Unfortunately, Brent oil price has since fallen to around US$30 per barrel (at this point in writing) which meant lesser revenue for the government.
Prime Minister, YAB Dato’ Sri Mohd Najib Bin Tun Razak has then announced a recalibrated 2016 Budget on 28 January 2016, to reflect the current economic climate, and to adjust the budget accordingly to address rising cost of living, stimulate investment activities and strengthen the country’s balance of payment.
The major measures taken by the government include:
• Employees’ contribution to the Employees Provident Fund (EPF) will be reduced by 3% from March 2016 to December 2017.
• For the year of assessment 2015, a special tax relief of RM2,000 to individual taxpayers with a monthly income of RM8,000 or below.
• Relaxation for penalty on taxpayers who declare their past years’ income and settled their arrears before 31 December 2016.
• The Government will restructure the selling channel of cigarettes and liquors limited to duty-free outlets licensed by the Royal Malaysian Customs Department (RMCD).
• The Government will tighten the duty-free treatment on imported vehicles in duty-free islands.
• 30% of the levy contribution to the Human Resources Development Fund (HRDF) will be provided to enhance the competency and skills of employees.
• RM6 billion additional financing funds from Development Financial Institutions (DFIs) and Government owned Venture Capital Funds (VCs) to provide financing for small and medium enterprises (SMEs) and start-up companies.
• For all new housing projects, houses priced up to RM300,000 are mandatorily for sale to first-time house buyers only.
• Organise Integrated House Ownership Expo Roadshows offering more than 100,000 housing units under the National Housing Department (JPN), 1Malaysia People Housing Programme (PR1MA), Syarikat Perumahan Negara Berhad (SPNB), Perumahan Penjawat Awam 1Malaysia (PPA1M) and state agencies as well as private sector.
• Financing package at 4% offered by Bank Simpanan Nasional (BSN) and Bank Rakyat for houses priced at RM35,000 under the People’s Housing Program.
• To alleviate the people’s burden from the rising cost of daily basic necessities:
- Temporary liberalisation of control on import quotas or approved permits on eight agriculture produce, including raw coffee beans, buffalo meat, beef and mutton.
- The Federal Agricultural Marketing Authority (FAMA) will establish markets or MyFarm Outlets that sell agricultural produce such as fish, poultry, meat, vegetables and fruits at prices that are 5% to 20% below market prices.
- Additional cash of RM50 will be given for every metric tonne of cleaned paddy as an input incentive for paddy production and introduce “MyBeras program” where every registered hardcore poor household will be supplied with 20kg of rice every month until December 2016.
- Set up enforcement of the Price Control And Anti-Profiteering Act 2011 and increase the number of fair price shops, including local and foreign hypermarkets, to 1,000 this year.