Economic Highlights Of Malaysia's 2017 Budget

KUALA LUMPUR, Oct 21 (Bernama) -- Following are the economic highlights of the 2017 Budget themed, "Accelerating Growth, Ensuring Fiscal Prudence Enhancing well-being of the People," tabled by Malaysian Prime Minister Najib Razak in Parliament (picture) on Friday. * Total budget allocation US$62.35 billion (RM260.8 billion, US$1 = RM4.18), up by 3.4 per cent from recalibrated 2016 Budget, of which RM214.8 billion is for operating expenses and RM46 billion development expenditure * Under RM46 billion development expenditure, economic sector to receive highest allocation of RM25.9 billion, social sector (RM12.2 billion), security (RM5.3 billion) and general administration (RM2.5 bilion) * Revenue collection in 2017 expected to grow by three per cent to RM219.7 billion * Government expectes to achieve 3 pct fiscal deficit in 2017 * GDP in 2016 4-4.5 per cent, 2017 4-5 per cent * No increase in Goods and Services Tax (GST) for 2017 * As at Oct 19, government has collected a total of RM30 billion in GST * Approved foreign direct investment in the first half of 2016 was more than RM28 billion, which is 32 per cent higher compared with the first half of last year * Domestic investments alone touched RM60 billion * Lifestyle tax relief up to RM2,500 from 2017 will include purchase of printed newspapers, smartphones and tablets, internet subscriptions and gym membership * Rate of stamp duty on instrument of transfer of real estate worth more than RM1 million to be increased to 4 pct from 3 pct, effective Jan 2018 * MIDA will be allocated RM522 million fund * Small and Mid-Cap PLC Research Scheme will be introduced to conduct research on 300 companies * Government-Linked Investment Companies will allocate special fund RM3 billion to fund managers under Securities Commission to invest in potential small and mid-cap companies * Capital Market Research Institute will be established with initial funding of RM75 million * Tax exemption period extended until 2020 for entities carrying out Islamic banking and Takaful business through International Currency Business Unit and stamp duty exemption * Government proposes to introduce a one-off increase of the existing RM500 incentive to RM1,000 to Private Retirement Scheme contributors. * A sum of RM130 million will be allocated to MATRADE, MIDA and SME Corp for export promotion programmes * Loan financing totalling RM200 million and insurance credit facilities with coverage valued up to RM1 billion will be provided by Exim Bank to SMEs * RM286 million is allocated to increase exports of palm oil, rubber, cocoa and pepper * RM50 million is allocated to conduct scientific research to enhance the quality of palm oil products * Grant of RM30 million will be provided through Malaysian Palm Oil Board (MPOB) for replanting of oil palm by smallholders * A sum of RM20 million is provided to upgrade estate roads, to facilitate oil palm smallholders * Through MDEC, a sum of RM162 million is allocated to among others, implement programmes such as the e-commerce ecosystem and Digital Maker Movement * Government will also introduce the first Digital Free Zone in the world * Effective January 2017, fixed line broadband service providers will offer services at a higher speed for the same price * A sum of RM75 million to be allocated to promote the development of SMEs * Guarantee up to RM15 billion provided under the various schemes of Syarikat Jaminan Pembiayaan Perniagaan (SJPP) to be extended till 2025 * To boost export-oriented SMEs, the Government will provide two pct rebate on interest rates charged to SME borrowers under the SJPP scheme * A sum of RM300 million to TEKUN to assist small-scale entrepreneurs to develop their businesses including a new scheme, TEMANITA, especially for women micro entrepreneurs * A sum of RM200 million to Perbadanan Usahawan Nasional Bhd to implement the Entrepreneurship and Business Premises Financing Programme to boost bumiputera entrepreneurship. * A sum of RM120 million to MARA for various entrepreneurship programmes, among others halal industry enterprises * Facilitation Fund amounting to RM500 million to TERAJU to assist Bumiputera companies to expand their businesses or to start a new business * A sum of RM100 million for Export Fund under TERAJU for Bumiputera companies to penetrate into international markets * A sum of RM100 million through Yayasan Peneraju Pendidikan Bumiputera for Peneraju Skil dan Iltizam, Peneraju Professional as well as Peneraju Tunas programmes * Income tax reduction for companies, including SMEs of between 1-4 percentage points for increase in chargeable income of between 5-20 per cent * Tax rate for all SMEs on chargeable income up to the first RM500,000 is reduced to 18 pct from 19 pct effective the year of assessment 2017 * To boost the local vendor development programme in the manufacturing and services sectors, double deduction on expenses incurred by the anchor company, will be extended until Dec 31, 2020. (photoBERNAMA) --BERNAMA