Budget 2007
PM tables Budget 2007
PETALING JAYA: Prime Minister Datuk Seri Abdullah Ahmad Badawi on Friday tabled the 2007 Budget in Parliament.
It is Abdullah's third budget since he became Prime Minister and Finance Minister.
The Economic Report 2006/2007 was also released simultaneously.
The Government proposed that the corporate tax rate be reduced by two percentage points in two stages - the tax will be reduced to 27% in 2007 and 26% in 2008. This is aimed at promoting greater private sector investment, said Abdullah Ahmad Badawi in presenting the Budget.
He announced a wide array of tax and financial incentives for the private sector to help it to continue as the catalyst that will spearhead the nation's economic growth.
Tax incentives are offered to the biotechnology sector. Bionexus companies, for instance, will be given tax exemption for 10 years.
Abdullah noted that computer ownership is low. Hence, the eligibility period for the incentive to buy a computer, currently given once in every five years, is shortened to once in every three years, and the RM500 tax rebate is replaced with a tax relief of RM3,000.
Among the highlights of the budget are:
# RM112.9 billion is allocated for operating expenditure, an increase of 11.6%.
# RM46.5 billion is allocated for development expenditure, an increase of 31%.
# The budget deficit will be reduced to 3.4% of GDP in 2007.
# A Customs tribunal will be established for appeals on decisions made by the Customs Director-General.
# Tax rebate of RM500 for computer purchases will be replaced with tax relief of RM3,000, once every three years.
# Students with 10A1s in SPM from families earning RM1,500 and below to be given scholarships for tertiary education.
# Tax relief on purchase of books increased from RM700 to RM1,000.
# Lower taxes for dividends received from real estate investment trusts (REITs). Dividends received by local and foreign individual investors and local unit trusts from listed REITs will be taxed at 15%, and for foreign institutional investors, 20%.
# To promote tourism, especially for Visit Malaysia Year 2007, income tax exemption for eligible tour operators is extended for five years.
# To foster a culture of maintenance, expenses incurred by property developers within the defects liability period will be allowed as deduction from the same project.
# Sime Darby will lead several new projects in agriculture, high tech industries and tourism in the Northern Corridor
# Perlis will be declared a promoted area in which designated projects will be eligible for a higher level of tax exemption.
# RM3.6 billion allocated to the agriculture sector.
# Exam fees for all public examinations abolished in all Government schools, beginning with 2007 school session.
# Excise duty on cigarettes up by one sen per stick. Duty on liquor with alcohol content of more than 40% up by RM5 per litre.
Malaysia to up spending in 2007 to keep economy growing at 6%
(Kyodo) _ The Malaysian government will increase spending by 11.6 percent to 157.5 billion ringgit (about $43.1 billion) in 2007 as it seeks to expand the economy by 6 percent, according to the annual Economic Report released by the Finance Ministry on Friday.
Prime Minister Abdullah Ahmad Badawi, who also holds the finance portfolio, is scheduled to present to Parliament details of his budget plan for next year later Friday.
According to the 2006-2007 Economic Report, of the 157.5 billion ringgit budget allocation for 2007, 44.5 billion ringgit will be for development expenditure such as building roads, bridges, and schools. This marks a 24.3 percent hike on 2006 but is within the financial projection laid out in March by Abdullah in his five-year economic blueprint known as the Ninth Malaysia Plan.
The plan entails spending of up to 220 billion ringgit between 2006 and 2010 to improve infrastructure, narrow the development gap between states and find new sources of growth. Abdullah hoped the spending would drive the economy to grow at an annual average of 6 percent.
This year the economy is expected to grow at 5.8 percent, above the 5.2 percent recorded in 2005.
On Wednesday, the central bank announced that the second-quarter gross domestic product growth was 5.9 percent, the highest quarterly growth in over a year. The first-quarter growth was 5.5 percent.
The government of this net oil-exporting country can afford an expansionary budget to boost the economy further given the windfall from rising oil prices.
Oil-related revenues such as royalties, taxes and dividends are expected to contribute 53.7 billion ringgit, or 39.9 percent, of the total government revenue of 134.8 billion ringgit in 2007. In 2006, they are estimated to make up 45 billion ringgit, or 37.3 percent, of total government revenue of 120.6 billion ringgit, the report said.
The increase in revenue will help lower the budget deficit to 3.4 percent of gross domestic product in 2007, down from 3.5 percent in 2006.
Abdullah had pledged to bring down the deficit through prudent spending when he took over the premiership in October 2003 from his predecessor Mahathir Mohamad.
His belt-tightening measures, however, have come with a political risk. The thousands of ethnic Malay contractors that rely solely on government contracts suddenly find their livelihoods drying up.
The construction sector as a whole contracted by 1.6 percent last year and this year is estimated to pick up marginally at 0.7 percent.
These Malay businessmen are key backers of Abdullah's party, the dominant United Malays National Organization. During Mahathir's 22-year rule, he had used government projects as tools to secure loyalty and now these businessmen are complaining of being ignored by Abdullah.
Abdullah's conservative spending policy has also become one of the thorny issues that led to the public spat between him and Mahathir chiefly because he cut back on some of Mahathir's pet projects such as a multi-billion ringgit bridge project to Singapore.
In the 2007 budget, Abdullah is expected to unveil 104 construction projects worth 2 billion ringgit, the English-language New Straits Times reported Thursday.
The projects are part of the 880 projects with a total value of 15 billion ringgit that Abdullah announced in July that will be available for tender soon. These projects are spread over five years in line with the Ninth Malaysia Plan.
With the government spending more on infrastructure, the construction sector is set to grow by 3.7 percent next year.
The government will also spend 11.9 billion ringgit on various subsidies such as fuel and fertilizers for farmers to ease the cost of living, the Economic Report said, marking an increase of 5.8 percent from this year.
Inflation soared to a seven-year high of 4.8 percent in March after Abdullah, in a move to cut the subsidies, increased retail petrol and diesel prices by as much as 23 percent in February. Since June, electricity rates have also gone up by an average of 12 percent. Inflation is expected to average 3.9 percent throughout 2006.
The services sector, which accounts for 58.2 percent of GDP, is predicted to expand by 5.7 percent in 2006 and 6 percent in 2007 as the government seeks to boost tourism with Visit Malaysia Year 2007.
Some 20.1 million tourists are expected to arrive in Malaysia, up from the targeted 17.5 million in 2006.
The rise in global demand for semiconductors will help push Malaysia's manufacturing sector to grow 7.3 percent this year and 6.8 percent in 2007.
The manufacturing sector accounts for 32 percent of GDP, the report said, adding that electrical and electronics items account for 63 percent of total manufactured exports.
The higher price for rubber and palm oil in tandem with higher demand, boosted the agriculture sector to grow 5.3 percent in 2006, 4.7 percent in 2007
The mining sector will grow from 2.4 percent this year to 4.5 percent in 2007 due to higher production of crude oil and gas following capacity expansion in upstream activities.
Malaysia, which has had a strong trade surplus since 1998, will continue to chart a surplus amounting to 145.7 billion ringgit in the goods account next year, up from the estimated 137.9 billion ringgit in 2006.
Exports will grow 9 percent to 655.2 billion ringgit in 2007 while imports will pick up by 10 percent to 509.5 billion ringgit.
While strategies are being laid down to boost the economy, the report also spoke of the downside risks.
"On the external front, concerns over high crude oil prices following strong demand and tight refining capacity as well as heightened geopolitical tensions in the Middle East are expected to remain," the report said. "This could lead to a sustained rise in global inflation and subsequent hikes in global interest rates, impacting both trade and growth."
"However, given Malaysia's endowment of crude oil resources and with prevailing high oil prices, the nation is in a better position to weather the moderation in global growth to achieve a strong growth of 6 percent in 2007," the report added.
(Kyodo News)
The Budget for 2007 being presented by Prime Minister Datuk Seri Abdullah Ahmad Badawi is not only aimed at making the country more economically competitive, but is also targeted towards lightening the load of Malaysians in general.
Among the measures to achieve this mission are the scrapping of school examination fees, a bonus of between one and two months for government servants, increased housing loans for civil servants, more houses for the low-income group, more funds for development in the agriculture sector, and helping to find employment for the 31,000 unemployed graduates in the country.
Corporate tax is being lowered by two percentage points from the present 28 per cent to 27 per cent in year of assessment 2007, and to 26 per cent in 2008.
This move is aimed at getting the private sector to be the main boost to the economic development in the country. It will also give Malaysia a more competitive corporate tax environment within the region.
In the Budget for 2007, there will be quality education and training at all levels as well as more scholarships for students with potential so as to develop the country’s human capital needed to achieve the objectives of Vision 2020.
For a workforce to be productive, measures at improving or maintaining health of the workers include more mobile clinics to generate awareness among the people in rural and remote areas on healthcare and nutrition, as well as provide free medical examinations, especially for early detection of chronic illnesses such as cancer, cardiac diseases, high blood pressure and diabetes.
The Economic Report 2006/2007
Read the Report here and here .
Malaysia Ahmad Badawi Economy Budget 2007
PETALING JAYA: Prime Minister Datuk Seri Abdullah Ahmad Badawi on Friday tabled the 2007 Budget in Parliament.
It is Abdullah's third budget since he became Prime Minister and Finance Minister.
The Economic Report 2006/2007 was also released simultaneously.
The Government proposed that the corporate tax rate be reduced by two percentage points in two stages - the tax will be reduced to 27% in 2007 and 26% in 2008. This is aimed at promoting greater private sector investment, said Abdullah Ahmad Badawi in presenting the Budget.
He announced a wide array of tax and financial incentives for the private sector to help it to continue as the catalyst that will spearhead the nation's economic growth.
Tax incentives are offered to the biotechnology sector. Bionexus companies, for instance, will be given tax exemption for 10 years.
Abdullah noted that computer ownership is low. Hence, the eligibility period for the incentive to buy a computer, currently given once in every five years, is shortened to once in every three years, and the RM500 tax rebate is replaced with a tax relief of RM3,000.
Among the highlights of the budget are:
# RM112.9 billion is allocated for operating expenditure, an increase of 11.6%.
# RM46.5 billion is allocated for development expenditure, an increase of 31%.
# The budget deficit will be reduced to 3.4% of GDP in 2007.
# A Customs tribunal will be established for appeals on decisions made by the Customs Director-General.
# Tax rebate of RM500 for computer purchases will be replaced with tax relief of RM3,000, once every three years.
# Students with 10A1s in SPM from families earning RM1,500 and below to be given scholarships for tertiary education.
# Tax relief on purchase of books increased from RM700 to RM1,000.
# Lower taxes for dividends received from real estate investment trusts (REITs). Dividends received by local and foreign individual investors and local unit trusts from listed REITs will be taxed at 15%, and for foreign institutional investors, 20%.
# To promote tourism, especially for Visit Malaysia Year 2007, income tax exemption for eligible tour operators is extended for five years.
# To foster a culture of maintenance, expenses incurred by property developers within the defects liability period will be allowed as deduction from the same project.
# Sime Darby will lead several new projects in agriculture, high tech industries and tourism in the Northern Corridor
# Perlis will be declared a promoted area in which designated projects will be eligible for a higher level of tax exemption.
# RM3.6 billion allocated to the agriculture sector.
# Exam fees for all public examinations abolished in all Government schools, beginning with 2007 school session.
# Excise duty on cigarettes up by one sen per stick. Duty on liquor with alcohol content of more than 40% up by RM5 per litre.
**********
Malaysia to up spending in 2007 to keep economy growing at 6%
(Kyodo) _ The Malaysian government will increase spending by 11.6 percent to 157.5 billion ringgit (about $43.1 billion) in 2007 as it seeks to expand the economy by 6 percent, according to the annual Economic Report released by the Finance Ministry on Friday.
Prime Minister Abdullah Ahmad Badawi, who also holds the finance portfolio, is scheduled to present to Parliament details of his budget plan for next year later Friday.
According to the 2006-2007 Economic Report, of the 157.5 billion ringgit budget allocation for 2007, 44.5 billion ringgit will be for development expenditure such as building roads, bridges, and schools. This marks a 24.3 percent hike on 2006 but is within the financial projection laid out in March by Abdullah in his five-year economic blueprint known as the Ninth Malaysia Plan.
The plan entails spending of up to 220 billion ringgit between 2006 and 2010 to improve infrastructure, narrow the development gap between states and find new sources of growth. Abdullah hoped the spending would drive the economy to grow at an annual average of 6 percent.
This year the economy is expected to grow at 5.8 percent, above the 5.2 percent recorded in 2005.
On Wednesday, the central bank announced that the second-quarter gross domestic product growth was 5.9 percent, the highest quarterly growth in over a year. The first-quarter growth was 5.5 percent.
The government of this net oil-exporting country can afford an expansionary budget to boost the economy further given the windfall from rising oil prices.
Oil-related revenues such as royalties, taxes and dividends are expected to contribute 53.7 billion ringgit, or 39.9 percent, of the total government revenue of 134.8 billion ringgit in 2007. In 2006, they are estimated to make up 45 billion ringgit, or 37.3 percent, of total government revenue of 120.6 billion ringgit, the report said.
The increase in revenue will help lower the budget deficit to 3.4 percent of gross domestic product in 2007, down from 3.5 percent in 2006.
Abdullah had pledged to bring down the deficit through prudent spending when he took over the premiership in October 2003 from his predecessor Mahathir Mohamad.
His belt-tightening measures, however, have come with a political risk. The thousands of ethnic Malay contractors that rely solely on government contracts suddenly find their livelihoods drying up.
The construction sector as a whole contracted by 1.6 percent last year and this year is estimated to pick up marginally at 0.7 percent.
These Malay businessmen are key backers of Abdullah's party, the dominant United Malays National Organization. During Mahathir's 22-year rule, he had used government projects as tools to secure loyalty and now these businessmen are complaining of being ignored by Abdullah.
Abdullah's conservative spending policy has also become one of the thorny issues that led to the public spat between him and Mahathir chiefly because he cut back on some of Mahathir's pet projects such as a multi-billion ringgit bridge project to Singapore.
In the 2007 budget, Abdullah is expected to unveil 104 construction projects worth 2 billion ringgit, the English-language New Straits Times reported Thursday.
The projects are part of the 880 projects with a total value of 15 billion ringgit that Abdullah announced in July that will be available for tender soon. These projects are spread over five years in line with the Ninth Malaysia Plan.
With the government spending more on infrastructure, the construction sector is set to grow by 3.7 percent next year.
The government will also spend 11.9 billion ringgit on various subsidies such as fuel and fertilizers for farmers to ease the cost of living, the Economic Report said, marking an increase of 5.8 percent from this year.
Inflation soared to a seven-year high of 4.8 percent in March after Abdullah, in a move to cut the subsidies, increased retail petrol and diesel prices by as much as 23 percent in February. Since June, electricity rates have also gone up by an average of 12 percent. Inflation is expected to average 3.9 percent throughout 2006.
The services sector, which accounts for 58.2 percent of GDP, is predicted to expand by 5.7 percent in 2006 and 6 percent in 2007 as the government seeks to boost tourism with Visit Malaysia Year 2007.
Some 20.1 million tourists are expected to arrive in Malaysia, up from the targeted 17.5 million in 2006.
The rise in global demand for semiconductors will help push Malaysia's manufacturing sector to grow 7.3 percent this year and 6.8 percent in 2007.
The manufacturing sector accounts for 32 percent of GDP, the report said, adding that electrical and electronics items account for 63 percent of total manufactured exports.
The higher price for rubber and palm oil in tandem with higher demand, boosted the agriculture sector to grow 5.3 percent in 2006, 4.7 percent in 2007
The mining sector will grow from 2.4 percent this year to 4.5 percent in 2007 due to higher production of crude oil and gas following capacity expansion in upstream activities.
Malaysia, which has had a strong trade surplus since 1998, will continue to chart a surplus amounting to 145.7 billion ringgit in the goods account next year, up from the estimated 137.9 billion ringgit in 2006.
Exports will grow 9 percent to 655.2 billion ringgit in 2007 while imports will pick up by 10 percent to 509.5 billion ringgit.
While strategies are being laid down to boost the economy, the report also spoke of the downside risks.
"On the external front, concerns over high crude oil prices following strong demand and tight refining capacity as well as heightened geopolitical tensions in the Middle East are expected to remain," the report said. "This could lead to a sustained rise in global inflation and subsequent hikes in global interest rates, impacting both trade and growth."
"However, given Malaysia's endowment of crude oil resources and with prevailing high oil prices, the nation is in a better position to weather the moderation in global growth to achieve a strong growth of 6 percent in 2007," the report added.
(Kyodo News)
**********
The Budget for 2007 being presented by Prime Minister Datuk Seri Abdullah Ahmad Badawi is not only aimed at making the country more economically competitive, but is also targeted towards lightening the load of Malaysians in general.
Among the measures to achieve this mission are the scrapping of school examination fees, a bonus of between one and two months for government servants, increased housing loans for civil servants, more houses for the low-income group, more funds for development in the agriculture sector, and helping to find employment for the 31,000 unemployed graduates in the country.
Corporate tax is being lowered by two percentage points from the present 28 per cent to 27 per cent in year of assessment 2007, and to 26 per cent in 2008.
This move is aimed at getting the private sector to be the main boost to the economic development in the country. It will also give Malaysia a more competitive corporate tax environment within the region.
In the Budget for 2007, there will be quality education and training at all levels as well as more scholarships for students with potential so as to develop the country’s human capital needed to achieve the objectives of Vision 2020.
For a workforce to be productive, measures at improving or maintaining health of the workers include more mobile clinics to generate awareness among the people in rural and remote areas on healthcare and nutrition, as well as provide free medical examinations, especially for early detection of chronic illnesses such as cancer, cardiac diseases, high blood pressure and diabetes.
*********
The Economic Report 2006/2007
Read the Report here and here .
Malaysia Ahmad Badawi Economy Budget 2007
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