BUDGET ENHANCES PEOPLE'S PURCHASING POWER, SAYS PM

KUALA LUMPUR, Aug 29 (Bernama) -- Budget 2009 enhances the purchasing power of the lower-middle income group by raising tax rebates and giving exemptions to all interest income and several food items.

It also reduces import duties on various consumer durables and the road tax on private passenger vehicles with diesel engines.

When tabling the budget Friday, Prime Minister Abdullah Ahmad Badawi said
that the government has proposed for the current tax rebate of RM350 per person
be increased to RM400 for those with taxable income of RM35,000 and
below.

With this increase, some 100,000 taxpayers would be out of the tax net, he
said.

To reduce the tax burden of individuals, especially those dependent on
interest income from savings, the government proposes that all interest income
for individuals be tax exempt.

The government also proposes full import duty exemption on several food
items which currently attract import duties of between two per cent and 20 per
cent and these include vermicelli, biscuits, fruits juices and canned sweet
corn.

The new meassures are introduced as the higher inflation rate has also
affected the purchasing power of the lower-middle income group, said Abdullah
who is also Finance Minister.

To mitigate the impact of rising prices on consumers, the government
proposes to reduce import duties on various consumer durables from between 10
per cent and 60 per cent to between five per cent and 30 per cent and these
include blender, rice cooker, microwave oven and electric kettle.

He said the government will reduce the road tax on private passenger
vehicles with diesel engines to be the same as those with petrol engines
effective Sept 1, 2008.

Currently, private passenger vehicles with diesel engines owned by
individuals and companies are subject to a higher road tax compared with those
with petrol engines.
-- BERNAMA