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Highlights of 2009 Budget

KUALA LUMPUR, 29 Aug 2008: These are the highlights of the 2009 Budget tabled in the Dewan Rakyat by Prime Minister Datuk Seri Abdullah Ahmad Badawi today. The theme of the budget is A Caring Government.

  • Malaysian economy grew 6.3% in the second quarter of 2008; to expand by 5.7% in 2008
  • Tax exemption for employees on staff benefits such as subsidised interest on housing, motor vehicles & education loans
  • Bills of mobile & fixed line phones as well as internet paid by employers to be tax-exempted
  • Government to provide RM3 billion soft loan facility under public transportation to finance acquisition of buses and rail assets; to be administered by Bank Pembangunan Malaysia Bhd
  • 50% reduction in toll charges for all buses, except at border entry points, for two years effective 15 Sept 2008
  • RM35 billion to improve efficiency of public transportation from 2009 to 2014
  • Farmers to benefit from proposal to abolish import duty on fertilisers & pesticides
  • Home ownership among civil servants to be boosted by extension of housing loans tenure to 30 years from 25 years
  • Government housing loan insurance panel to be expanded to all eligible insurance companies from only five insurance companies now 
  • Excise duties on cigarettes up three sen to 18 sen per stick. Duty for 20-stick pack now up 60 sen
  • Highest marginal tax rate for individuals to be cut to 27% from 28% effective year of assessment 2009
  • Middle income group to benefit from cut in marginal tax rate to 12% from 13%
  • New investments by operators of four-star & five-star hotels in Sabah and Sarawak to enjoy pioneer status with 100% income tax exemption or investment tax allowance of 100% for five years
  • Venture capital companies to enjoy five-year tax exemption for investing at least 30% of their funds in start-up, early stage financing or seed
  • Accelerated capital allowance for purchase of ICT equipments can be claimed over one year instead of two years
  • Import prohibition on cranes used at ports to be removed. Import duty for the cranes cut to 5% from 20%
  • Travel allowance for commuting to work provided by employers to be fully tax deductable; employees receiving such an allowance be given tax exemption of up to RM2,400 per year
  • One month bonus for civil servants, subject to a minimum of RM1,000. Payment to be made in two instalments; to be paid in September and December 2008.
  • Import duty and sales tax on solar photovoltaic system equipment – removed
  • Import duty and sales tax on intermediate goods such as high efficiency motors and insulation materials – removed
  • Sales tax on locally manufactured solar heating system equipment – removed
  • Sales tax on locally manufactured energy efficient consumer goods such as refrigerators, air conditioners, lightings, fans & TVs – removed
    Exemption of 100% import duty & 50% excise duty on new hybrid CBU cars, with engine capacity below two 2,000 cc litre to be given to franchise importers. The exemption is for two years 
  • Tax rate on Real Estate Investment Trusts (REITs) to be reduced to 10% from 15 % – Bernama

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