On 21 October 2016, the Prime Minister and Minister of Finance, YAB Dato’ Seri Mohd Najib Tun Razak delivered his eighth National Budget speech themed “Ensuring Unity and Economic Growth, Inclusive Prudent Spending, Wellbeing of the People”.

Small and medium enterprises (SMEs) have contributed significantly to the economy and growth of Malaysia. In recognition of the contributions, the Government has proposed that the tax rate of SMEs be reduced by 1% from 19% to 18% on chargeable income up to RM500, 000. Moreover, corporate tax rate reduction of 1 to 4 percentage points are given to companies depending on the amount of increase in taxable income for the Years of Assessment 2017 and 2018.

Keeping abreast with the changes in the way of living, a new tax relief known as lifestyle relief is introduced to combine the existing tax relief for purchase of reading materials, sports equipment, computers and broadband internet subscription. Individual taxpayers can claim a tax relief of up to RM2, 500 for the following:

• Purchase of printed daily newspaper;
• Purchase of smart phone and tablet;
• Internet subscription; and
• Gymnasium membership fee.

Malaysian Government acknowledged that women have played a very important role in the prosperity of the nation and nurturing the future generation. In appreciation, the Government has proposed the following new tax reliefs:

• Tax relief of up to RM1,000 for purchase of breastfeeding equipment; and
• Tax relief of up to RM1, 000 for fees paid to child care centres and kindergartens.

Furthermore, stamp duty exemption is introduced to reduce the burden of the people for purchase of first home. 100% stamp duty exemption be given on instruments of transfer and loan agreements for the purchase of the first home, priced not exceeding RM300, 000. Properties which are priced in excess of RM300, 000 up to RM500, 000 are given 100% stamp duty exemption but limited to the first RM300,000 of the value of the property. The remaining value of the property is subject to the prevailing stamp duty rates.

On an overall view, the Budget 2017 is a caring budget committed to improve the well-being of the people.