The Malaysia budget 2012 is expected to see a 15.9% increase in the private sector investments. This will also be aided by domestic and overseas investment.
Malaysia Budget 2012 Highlights:
Following are the major highlights of the Malaysian Budget:
Impact on Business Sector:
In 2012 the Malaysian service sector is supposed to increase by 6.5% and the construction sector will grow by 7%.
MYR18 billion from the PPP Facilitation Fund, which has 20 billion Malaysian Ringgit, will be employed in several highly important projects. Bumiputera Entrepreneurs will be allotted MYR2 billion.
The Kuala Lumpur International Financial District will be created in 2012 fiscal. Several incentives like tax exemptions will be given to companies that operate in this region.
Exchange traded funds that adhere to the Shariah rules will receive 200 million Malaysian Ringgit in 2012. This amount will be spent for promotion and development of I-VCAP, an ETF.
An SME Revitalization Fund of MYR100 million will be set up in January 2012. This fund will provide a maximum loan of 1 million Malaysian Ringgit for the entrepreneurs.
In 2012 the national administration will focus on increasing investment and also liberalize 17 sub-sectors in the services segment this will allow complete investment of foreign equity in these areas.
Electric and hybrid cars will be given complete exemption from excise and import duty till 2013 fiscal.
The Langkawi Five Year Tourism Development Master Plan will be introduced in 2012 fiscal RM420 million will be earmarked for this project that will be used to encourage the tourism sector.
The Malaysia Healthcare Travel Council will be sold to private owners so that the country can be developed and promoted as a top health tourism destination.
100 million Malaysian Ringgit will be earmarked for encouraging innovation. This will also include the 1Malaysia Award that will reward students for their innovation.
Commercialisation Innovation Fund will be set up with an allotment of RM500 million. This fund will assist the small and medium enterprises commercialize their research products.
The MyCreative Venture Capital fund will be established with a starting allocation RM200 million. 15 million Malaysian Ringgit will also be used for setting up 150 futsal courts across the country.
Impact on Economy:
The GDP growth for the 2012 Malaysia budget is expected to range from 5 to 6 percent.
978 million Malaysian Ringgit will be allotted for increasing the speed of development in five regional corridors.
The Malaysia budget 2012 has allotted 232.8 billion Malaysian Ringgit for various governmental programs. This will also include MYR51.2 billion for developmental programs and MYR181.6 billion for management initiatives.
The Treasury Management Centre will be set up in 2012 and several incentives will be offered to make Malaysia a top name among global economies.
The income tax exemptions that are available to the non-Ringgit sukuk issuance and the transactions in the sector will be extended by 3 years.
In 2012 Malaysia will earn revenues worth 186.9 billion Malaysian Ringgit, which will be 1.9% more than the 2011 fiscal. Budgetary deficit will also come down from 5.4% of the GDP in the present financial year to 4.7% of the GDP.
The basic themes of the budget for the upcoming fiscal are efficient implementation of the National Transformation Policy that will help with the overall economic performance and well-being.
2012 will see the introduction of the National Agro-Food Policy 2011-2020; the agriculture sector will be provided RM1.1 billion for developmental purposes.
The subsidies, assistance and incentives, which are worth RM33.2 billion, will be provided in the upcoming fiscal as well.
The private sector will be encouraged to conduct programs focused on human capital development. The incentives in this case will include double deductions for scholarship programs.
A Rural Transformation Programme will be established in order to help that sector draw more investors and thus create additional jobs.
5 billion Malaysian Ringgit will be allotted for developing the rural infrastructure RM1.8 billion will be earmarked for the Rural Road Programme & Village-Link Road Project.
Bank Simpanan Nasional will employ agents in the rural areas to make sure that the rural people have more access to banking services.
Impact on Infrastructure:
The infrastructure, industrial and rural development sector will be provided 29.8 billion Malaysian Ringgit in 2012.
98.4 billion Malaysian Ringgit will be provided for the RP2 projects in 2012 and 2013 fiscals. The amount will be allocated in equal parts. As part of RP2 projects the roads within Ranau and Kota Marudu will be upgraded. The East Coast Highway that runs between T ganu and Jabor will be covered in the project as well.
500 million Malaysian Ringgit will be used for increasing the clean water supply program for the Sabah rural community.
Some chosen Felda areas will be provided RM400 million for improving the infrastructure of water supply.
MYR13.6 billion has been earmarked for expenses in the social sector. This will include expenditure in sectors like education and training, community and housing development, and other welfare programs.
There will be a review of the real property gains tax so that the middle and lower income groups are able to purchase homes.
2012 is going to be the National Innovation Movement Year. The budget will focus on development of human capital, innovation and creativity.
The KAR1SMA program, which benefits economically backward senior citizens, disabled people and children, will help approximately 500,000 people.
The scope of the My First Home Scheme will be upped. This will increase the maximum limit of housing prices to RM400000 from RM220000.
The Program Perumahan Rakyat, which focuses on providing economically viable housing, will continue in 2012 fiscal as well, with the government setting up 75 thousand such buildings.
The Special Housing Fund for Fishermen will be set up by the government in order to repair and build their houses.
Contributions made to places of worship and educational institutions will be exempted from taxation.
Skim Amanah Rakyat 1Malaysia will help 100,000 families whose monthly earnings are lesser than RM3000.
In 2012, taxi purchases will be made tax exempt in order to help owners who are facing greater operational costs.
The National Legal Aid Foundation will help with free legal aid for all.
Anjung Singgah, a social assistance center, will assist the homeless.
Women will be provided a training fund, totaling RM10 million, for developing their managerial and leadership skills.
The aboriginal population in Malaysia will be provided with 90 million Malaysian Ringgit for meeting their basic requirements. This will include increasing the clean water supply project. The first nations people who have been affected by the Sungai Ruil landslides will be provided RM20 million for relocation purposes.
Contributions to the Private Retirement Schemes will be provided tax relief in 2012. Patients who are 60 years old or more will not be required to pay outpatient registration charges at government health clinics and hospitals.
Families with maximum monthly earnings of RM3000 will be provided with a one-time financial assistance of RM500. Private sector employees earning RM5000 will see an increase in their EPF contribution from the employers it will go up to 13% from 12%.
The education sector will be allotted 50.2 billion Malaysian Ringgit for developing creative and talented students.
RM1 billion will be made available via a special fund this fund will help in setting up, maintaining and improving schools across the country.
For the first time ever in Malaysia s history, secondary and primary education will be free.
Private schools that have are recognized by the Education Ministry, will be provided with incentives, which are inclusive of an Investment Tax Allowance.
In every private and public higher educational institution, students will be provided book vouchers worth RM200.
50 new clinics of 1Malaysia will be built in 2012, along with improvement of 81 health clinics in the rural areas.
RM 1.8 billion will be provided for development related expenses. The healthcare sector will be allotted RM15 billion for meeting operational expenses.
The oldest Malaysian hospital, Hospital Kuala Lumpur, will be improved to become the top hospital in the country.
Immunization from Human Papilloma Virus will be made available for free across the country to stop cervical cancer.
The salaries of civil servants will increase by RM80-RM320. They will also be given help for enrolling in part time programs. This program will include 500 doctoral and 5 thousand masters scholarships.
Compulsory retirement age will be taken up to 60 years from 58 years.
The civil servants will be provided extra bonus equaling 50% of their salary pensioners will be provided RM500.
175,000 army officers, who are not eligible to receive pensions, will now have a special program for them.
Former members of the auxiliary police and special constable units will be provided RM3000. Widowers and widows of these officers will be eligible for this benefit too.
The additional yearly pension will be increased by 2%. This is expected to help 600,000 pensioners who previously worked in the public sector.