BUDGET 2016 Chua Tia Guan 25.10.2015. Corporate & Individual Income Tax RM (m)20122013201420152016...
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Transcript of BUDGET 2016 Chua Tia Guan 25.10.2015. Corporate & Individual Income Tax RM (m)20122013201420152016...
BUDGET2016
Chua Tia Guan25.10.2015
Corporate & Individual Income Tax
RM (m) 2012 2013 2014 2015 2016 forecast
Companies 51,288 58,175 65,240 68,320 74,381
Individual 22,977 23,055 24,423 28,155 30,266
Total 74,265 81,230 89,663 96,475 104,647
IncreaseN/A 6,965 8,433 6,812 8,172
Growth9.4% 10.4% 7.6% 8.5%
2
Corporate & Individual Income Tax
3
Income tax changes affecting
Companies
Tax incentives
Reinvestment allowance (RA)
Current•60% qualifying project for 15 years beginning from 1st year RA claimed
Proposed•Special RA for companies for 3 years after expiration of 15 years
From Year of Assessment 2016 to 2018
6
Increased export allowanceCurrentExemption equivalent to •10% value of increased exports with ≥ 30% value added•15% value of increased exports with ≥ 50% value added
ProposedFor SME : •10% value of increased exports with ≤ 20% value added•15% value of increased exports with ≤ 40% value added
From year of assessment 2016 to 2018 7
R&D project
Current•Double deduction on R&D expenditure subject to IRB approval
Proposed•SME – double deduction up to RM50,000 per year without approval requirement
From year of assessment 2016 to 2018
8
Food production projectsCurrent
•Vegetables, fruits, kenaf, herbs, spices, cows, buffaloes, goat, sheep, acquaculture , deep sea fishing
•Investment in subsidiary is given a tax deduction
•New - 100% income tax exemption for 10 years
•Expansion - 100% income tax exemption for 5 years
9
Food production projectsProposed
•Extension of 5 years
•Scope widen to include planting of coconuts, mushrooms & cash crops, rearing of deer, seaweed cultivation, rearing of honey, animal feed crops
From 1 Jan 2016 to 31 Dec 2020
10
Tour operating companies
Current•100% income tax exemption for tour packages within Malaysia by ≥ 1,500 local tourists per year
•100% income tax exemption for tour packages to Malaysia by ≥ 750 inbound tourists per year
Proposed•Extension of 3 years
From year of assessment 2016 to 2018
11
Establishment of Independent Conformity Assessment Bodies (ICAB)
ICAB – Co that offers independent conformity assessment services to test products, materials, systems or services for conformance to international specifications or safety standards & other conformities
Previously, labs testing medical devices given tax incentive.
12
Establishment of Independent Conformity Assessment Bodies (ICAB)
Current•Nil
Proposed•New ICAB – 100% statutory income tax exemption on qualifying activities for 5 years; or
•New ICAB – Investment tax allowance (ITA) of 60% on qualifying capital expenditure for 5 years offset against 100% of statutory income
•Existing ICAB – ITA of 60% on qualifying capital expenditure for 5 years offset against 100% of statutory income
From 1 Jan 2016 to 31 Dec 201813
Establishment of Independent Conformity Assessment Bodies (ICAB)
Qualifying Sectors
•Machinery & equipment•Electrical & electronics•Chemicals•Aerospace •Medical devices•Fresh & processed food
14
Eligible activities
•Testing laboratories•Calibration•Certification•Inspection•Good laboratory
Establishment of Independent Conformity Assessment Bodies (ICAB)
ICAB accreditated by :
•Department of Standards Malaysia
•Accreditation bodies recognised by International Laboratory Accreditation Cooperation
•International Accreditation Forum
•OECD Good Laboratory Practice Mutual Acceptance Data
15
Withholding tax of 10%
Current•Withholding tax of 10% on profit distribution from listed REITs for foreign institutional investors & individuals
Proposed•Extension of 3 years
From 1 January 2017 to 3 December 2019
16
Funding
Shariah-compliant SME Financing Scheme
•RM1billion•Subsidy of 2% of financing profit rate
SME Blueprint
•RM107m – funds for entities for business development
Entrepreneurs Acceleration Scheme, and SME Capacity and Capability Enhancement Scheme
•RM60million
SME Funding
18
SME Funding
SME Technology Transformation Scheme
•RM200million under SME bank•Softloan at 4% interest
Small Retailer Transformation Programme (TUKAR) & Automotive Workshop Modernisation (ATOM)
•RM18million
19
Other FundingMATRADE
•RM235 million•1Malaysia Promotion Program•Service Export Fund•Export Promotion Fund
IBS Promotion Fund
•RM500million – Industrial Building System
Agriculture
•RM450million •High impact projects•Fruit & vegetable cultivation•Matching grants for herbal products, fish cage farming20
GST changes
GST update Number of registrants – by Customs Administration
22
GST update Number of registrants – by Entity
23
GST update Number of registrants – by Sector
24
Food items - addition
Proposed•Organic-based milk for infant & children•Soy bean based milk for infant & children•Dhal bean include chickpeas and green & white bean•Vegetables include lotus root and water chestnut•Spices include mustard seeds•Sugar include jaggery powder•Noodle products include “mi kolok”
From 1 January 2016
Zero rated
25
Drugs / medicine addition
Proposed•All types of Controlled Drugs in Poison Groups A,B, C & D under Poisons Act 1952•Expansion of Over the Counter Medicine from 1,013 brand of drugs to 1,105•Medical devices under NEML expanded from 125 brands to 128
From 1 January 2016
Zero rated
26
Domestic air transport - addition
Proposed•Domestic air transportation for passengers within and between Sabah, Sarawak & Labuan
From 1 January 2016
Zero rated
27
Flat rate scheme - farmers
Current•Threshold for registration- RM100,000
Proposed•Threshold for registration- RM50,000
From 1 January 2016
GST special scheme
28
Reimportation of goods temporarily exported for promotion, research or exhibition
Proposed•Relief from GST payment
From 1 January 2016
GST incentive – GST relief
29
Reimportation of goods temporarily exported for rental & lease
Proposed•Relief from GST payment
From 1 January 2016
GST incentive – GST relief
30
Income tax changes affecting
Individuals
Review of income tax rateChargeable income
(RM)Current Tax Rate
(%)Proposed Tax Rate
(%)
1 – 5,000 0 0
5,001 – 20,000 1 1
20,001 – 35,000 5 5
35,001 – 50,000 10 10
50,001 – 70,000 16 16
70,001 – 100,000 21 21
100,001 – 250,000 24 24
250,001 – 400,000 24.5 24.5
400,001 – 600,000 25 25
600,001 – 1,000,000 25 26
> 1,000,000 25 28
From Year of Assessment 2016 32
Review of income tax rateChargeable income
(RM)Proposed Tax
Rate(%)
Chargeable income(SGD)
Singapore Tax Rate
1 – 5,000 0 1 – 5,000 0
5,001 – 20,000 1 5,001 – 20,000 0
20,001 – 35,000 5 20,001 – 30,000 2
35,001 – 50,000 10 30,001 – 40,000 3.5
50,001 – 70,000 16 40,001 – 80,000 7
70,001 – 100,000 21 80,001 – 120,000 11.5
100,001 – 250,000 24 120,001 – 160,000 15
250,001 – 400,000 24.5 160,001 – 200,000 17
400,001 – 600,000 25 200,001 – 320,000 18
600,001 – 1,000,000 25 to 26 > 320,000 20
> 1,000,000 25 to 28
From Year of Assessment 201633
Spouse relief
Current•RM3,000 where spouse has no income
Proposed•RM4,000 where spouse has no income
From Year of Assessment 2016
Tax relief
34
Alimony to former wife
Current•RM3,000
Proposed•RM4,000
From Year of Assessment 2016
Tax relief
35
Parental care relief
Current•RM5,000 for medical treatment & care of parents
Proposed•RM1,500 each* for parental care
From Year of Assessment 2016 until 2020
Tax relief
36
Parental care relief
* Conditions•No claim for parents’ medical care relief
•Parents are natural parents or foster parents by law subject to a maximum of 2 parents
•Parents aged 60 years and above
•Parents reside in Malaysia in current year of assessment; and
•Parents have an annual income <RM24,000 per annum each
Tax relief
37
Relief for children below 18 years old
Current•RM1,000 for each child
Proposed•RM2,000 for each child
From Year of Assessment 2016
Tax relief
38
Relief for children studying at tertiary level
Current•RM6,000 for each child
Proposed•RM8,000 for each child
From Year of Assessment 2016
Tax relief
39
Relief on fees for tertiary education
Current•RM5,000•Certificate/Diploma/Degree : law, accounting, Islamic finance, vocational, technical, industrial, scientific & technological skills or qualification•Master / Doctorate : all fields
Proposed•RM7,000
From Year of Assessment 2016
Tax relief
40
Relief on contribution to SOCSO
Current•Nil
Proposed•RM250
From Year of Assessment 2016
Tax relief
41
Other changes
Exemption on revived abandoned housing
Current•Instruments of loan agreement for financing•Instruments of transfer of title•From 1 January 2013 to 31 December 2015
Proposed•Extension of 2 years
Effective from 1 Jan 2016 to 31 Dec 2017
Stamp duty
43
Exemption on Shariah financing
Current•20% exemption on housing financing instruments•From 2 September 2006 to 31 December 2015
Proposed•Extension of 2 years
Effective from 1 Jan 2016 to 31 Dec 2017
Stamp duty
44
ThankYou
46
Vision 2020 = RAKYAT + quality of life High Income, Inclusiveness, Sustainability
11th MP = Anchoring Growth on People•Enhancing inclusiveness towards an equitable society•Improve well being for all•Accelerate human capital development for an advance nation•Pursuing green growth sustainability and resilience•Re-engineering economic growth for great prosperity
Budget 2016Prospering The Rakyat
Financial target of 2020
2015 2016 2020
GNI per capita (USD)
10,196 ?? USD15,690
Budget deficit 3.2% 3.1% 0%
Government debt 54% ?? 45%
Source : 11MP & 2016 Econ Rpt
47
Rationalising operating expenditure
Billion (RM) 2010 2016 2020
Operating expt 151b 215b 290b
74% 81% 86%
Gross Dev expt 53b 50b 48b
26% 19% 14%
Total Budget 204b 265b 337bSource : 11MP & 2016 Econ Rpt
• Value for money• Open tender --- eProcurement, e-Bidding• Outcome based budgeting :
–operating + development48
Rationalising public sector for greater productivity & performance Billion (RM) 2010 2016 2020
Emolument &pension, etc
58b 90b 120b
28% 34% 36%
Gross Dev expt 53b 50b 48b
26% 19% 14%
Total Budget 204b 265b 337b
Execution is the key :•Reducing overlapping roles•Rightsizing the public service•Exit policy for under performers
49
Lower education allocation for 2016
million (RM) 2014 2015 2016
Education & training **
4,928 5,629 4,691
-23.5% 14.2% -16.7%
** development expenditure
50
Fiscal discipline and reforms
• Diversified sources of income• Resilience of economy• Preserve the value of ringgit• Credit rating
51
RelianceIncome
TaxGST
Oil revenue
55,956
35,529
25,331
0
10,000
20,000
30,000
40,000
50,000
60,000
2014 2015 2016 (F)
OIL REVENUE (P ITA + DIV) (RM million)
OIL REVENUE
Source: Economic Report 2015/2016 52
17,216
34,635
39,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2014 2015 2016 (F)
SST/GST Revenue (Sales tax, Service tax & GST) (RM mill ion)
SST/GST REVENUE
Source: Economic Report 2015/2016 53
55,956
35,529
25,331
17,216
34,635
39,000
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2014 2015 2016 (F)
OIL REVENUE SST/GST (RM mill ion)
OIL + SST/GST REVENUE
Source: Economic Report 2015/2016 54
73,172
70,16464,331
GST collection & Oil revenue2014 2015 2016
Actual Brent(USD99)
Budgeted Brent
(USD100)
Rev(ER) Brent(USD50)
Budgeted Brent (USD48)
RM Million
Oil revenue 66,274 62,428 43,872 31,718
PITA 26,956 25,600 9,529 9,331
Dividend 29,000 27,000 26,000 16,000
GST/SST 17,216 31,608 34,635 39,000
SST 17,216 *4,608 *7,635 -
GST - **27,000 **27,000 39,000
Total 83,490 94,036 78,507 70,718
Net revenue difference (y-o-y)
N/A 10,546 -4,983 -7,789
* SST (Jan – Mar 2015) ** GST (Apr – Dec 2015)55
Category UnitMonthly income
BR1M value
Payment frequency
Household 4.7 m
≤ RM3,000RM1,000
(2015: RM950)
Monthly
RM3,001 –RM4,000
RM800(2015:
RM750)Monthly
Individual 2.7 m ≤ RM2,000RM400(2015:
RM350)
RM400 - January
e-Kasih ≤ RM1,000 RM1,050 Monthly
56
RM5.9 b
RM
Labour productivity
Household income
M40 mean
monthly
B40 mean
monthly
2020 92,300 9,970 5,270
2014/15 77,100 5,662 2,537
High income USD15k = quality of life ?
57
• Wages rise faster than productivity• Purchasing power
58
Global Labour Productivity Frontier
US 70,242
Malaysia 25,090
Spore 49,464
HK 65,598
Korea 46,098
Source : Productivity Report 2014/2015
59
SL1MUp-skill Re-
skillMulti-skill
B40 TVET PLWS
60
Vision 2020 = RAKYAT + quality of life High Income, Inclusiveness, Sustainability
11th MP = Anchoring Growth on People•Enhancing inclusiveness towards an equitable society•Improve well being for all•Accelerate human capital development for an advance nation•Pursuing green growth sustainability and resilience•Re-engineering economic growth for great prosperity
Budget 2016Prospering The Rakyat
Financial target of 2020
2015 2016 2020
GNI per capita (USD)
10,196 ?? USD15,690
Budget deficit 3.2% 3.1% 0%
Government debt 54% ?? 45%
Source : 11MP & 2016 Econ Rpt
61
Rationalising operating expenditure
Billion (RM) 2010 2016 2020
Operating expt 151b 215b 290b
74% 81% 86%
Gross Dev expt 53b 50b 48b
26% 19% 14%
Total Budget 204b 265b 337bSource : 11MP & 2016 Econ Rpt
• Value for money• Open tender --- eProcurement, e-Bidding• Outcome based budgeting :
–operating + development62
Rationalising public sector for greater productivity & performance Billion (RM) 2010 2016 2020
Emolument &pension, etc
58b 90b 120b
28% 34% 36%
Gross Dev expt 53b 50b 48b
26% 19% 14%
Total Budget 204b 265b 337b
Execution is the key :•Reducing overlapping roles•Rightsizing the public service•Exit policy for under performers
63
Lower education allocation for 2016
million (RM) 2014 2015 2016
Education & training **
4,928 5,629 4,691
-23.5% 14.2% -16.7%
** development expenditure
64
Fiscal discipline and reforms
• Diversified sources of income• Resilience of economy• Preserve the value of ringgit• Credit rating
65
RelianceIncome
TaxGST
Oil revenue
55,956
35,529
25,331
0
10,000
20,000
30,000
40,000
50,000
60,000
2014 2015 2016 (F)
OIL REVENUE (P ITA + DIV) (RM million)
OIL REVENUE
Source: Economic Report 2015/2016 66
17,216
34,635
39,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2014 2015 2016 (F)
SST/GST Revenue (Sales tax, Service tax & GST) (RM mill ion)
SST/GST REVENUE
Source: Economic Report 2015/2016 67
55,956
35,529
25,331
17,216
34,635
39,000
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2014 2015 2016 (F)
OIL REVENUE SST/GST (RM mill ion)
OIL + SST/GST REVENUE
Source: Economic Report 2015/2016 68
73,172
70,16464,331
GST collection & Oil revenue2014 2015 2016
Actual Brent(USD99)
Budgeted Brent
(USD100)
Rev(ER) Brent(USD50)
Budgeted Brent (USD48)
RM Million
Oil revenue 66,274 62,428 43,872 31,718
PITA 26,956 25,600 9,529 9,331
Dividend 29,000 27,000 26,000 16,000
GST/SST 17,216 31,608 34,635 39,000
SST 17,216 *4,608 *7,635 -
GST - **27,000 **27,000 39,000
Total 83,490 94,036 78,507 70,718
Net revenue difference (y-o-y)
N/A 10,546 -4,983 -7,789
* SST (Jan – Mar 2015) ** GST (Apr – Dec 2015)69
Category UnitMonthly income
BR1M value
Payment frequency
Household 4.7 m
≤ RM3,000RM1,000
(2015: RM950)
Monthly
RM3,001 –RM4,000
RM800(2015:
RM750)Monthly
Individual 2.7 m ≤ RM2,000RM400(2015:
RM350)
RM400 - January
e-Kasih ≤ RM1,000 RM1,050 Monthly
70
RM5.9 b
RM
Labour productivity
Household income
M40 mean
monthly
B40 mean
monthly
2020 92,300 9,970 5,270
2014/15 77,100 5,662 2,537
High income USD15k = quality of life ?
71
• Wages rise faster than productivity• Purchasing power
72
Global Labour Productivity Frontier
US 70,242
Malaysia 25,090
Spore 49,464
HK 65,598
Korea 46,098
Source : Productivity Report 2014/2015
73
SL1MUp-skill Re-
skillMulti-skill
B40 TVET PLWS
