Malaysia Budget 2013 - How the Budget Can Save You Money

What is the Malaysian Budget 2013?

The Malaysian Budget 2013 is essentially a report on the nations finances, the usual things include how much the government is expected to make in taxes and other things on one side (government revenue) and how much it intends to spend in projects and initiatives (government expenditure), with policy changes including income tax reductions/increases, duties, concessions, handouts to the poor and needy etc. thrown in to keep the public interested.

Why does it matter? Policy changes such as tax reliefs/rebates on various things like cars, broadband, smartphones(!), and personal reliefs will directly affect your wallet and the amount of Money you can Save! Taking the government of the day and political motives out of the equation, SaveMoney.my will look at how the announcement may affect your own personal finances and expenditure!

For the full analysis on Malaysian Personal Income Taxes, you may check out our Malaysia Personal Income Tax Guide 2012 article.

How does the Budget 2013 Affect Me?

While the majority of the budget encompasses high level items such as multi-million (and billion) Ringgit investment in various industries and services which affect Malaysians indirectly (and some directly), we will focus on the aspects of the Budget that are mentioned explicitly to help Malaysians Save Money.

Cash Handouts

BR1M 2.0 - RM500 for families, RM250 for individuals

In the previous year's Budget (2012), the government announced a one off cash payment for low income families, i.e. a RM500 cash voucher to families with household income of less than RM3,000 a month. In the Budget 2013, the policy has not only been continued, but extended to single individuals aged 21 years and above and with a personal monthly income of less than RM2,000. In short:

BR1M 2.0Voucher AmountEligibility
HouseholdsRM500- Families with household income less than RM3,000
Single IndividualsRM250- Single, aged 21 and above, and earning less than RM2,000

I am eligible for BR1M 2.0, how do I get this handout, and when?

While no firm dates have been announced yet, we expect the payout to commence in January 2013. People who have already registered and applied for the first BR1M last year will have already been registered for BR1M, and will be informed of their eligibility by January 2013, and people who didn't can start applying in November 2012 through District Offices, State Development Offices and LHDN offices throughout the country or online, for more information you can check out our full BR1M 2.0 guide here.

Schooling Assistance - RM100 for Primary and Secondary School Students

An continuation of Budget 2012's policy, with RM100 to be disbursed to 5.4 million students starting January 2013. The cash voucher may be claimed directly from schools by parents and children.

Income Tax Policy Changes

For the full analysis on current Malaysian Personal Income Taxes in 2012, you may check out our Malaysia Personal Income Tax Guide 2012 article.

1% Reduction in Income Tax Rate for each Band below RM50,000

One of the biggest changes in Budget 2013 was to income tax rates, with a 1% reduction in all bands below a chargeable income of RM50,000, aimed at saving money for low and middle income families. This will be effective for income tax assessment in 2013.

New bands:

Chargeable IncomeTax RateCumulative TaxBudget 2013 Tax RateBudget 2013 Cumulative TaxSaving
From RM0 - RM2,5000%RM00%RM0RM0
From RM2,501 - RM5,0001%RM250%RM0RM25
From RM5,001 - RM10,0003%RM1752%RM100RM75
From RM10,001 - RM20,0003%RM4752%RM300RM175
From RM20,001 - RM35,0007%RM1,525 6%RM1,200 RM325
From RM35,001 - RM50,00012%RM3,325 11%RM2,850 RM475
From RM50,001 - RM70,00019%RM7,125 19%RM6,650 RM475
From RM70,001 - RM100,00024%RM14,325 24%RM13,850 RM475
RM100,001 and Above26%26%

For the full analysis on current Malaysian Personal Income Taxes in 2012, you may check out our Malaysia Personal Income Tax Guide 2012 article.

Tax Relief for SSPN Savings increased from RM3,000 to RM6,000

To encourage families to save for their children's higher education, the SSPN tax relief has been increased from RM3, 000 to RM6,000. This doubles the maximum tax saving from RM780 to RM1,560. See full calculations in our SSPN article here.

Tax Relief for Families with Children in Higher Education increased from RM4,000 to RM6,000

To encourage families to send their children on to higher education (IPTs) the tax relief for families with children in higher education has been raised from RM4,000 to RM6,000 per child.

Tax Relief for Angel Investors - Deduct Full Investment Amount from Income

Angel Investors are people who invest their money in ventures at an early stage prior to the company being able to go to the capital markets to obtain equity and debt financing.

With this tax relief, angel investors can deduct the entire investment amount from their chargeable income, but with the following conditions:

The Angel investor must:

1. Be a Resident for tax purposes and have an annual income higher than RM180,000.
2. Hold at least 30% of the shares in the invested venture for 2 years, paid for in cash.

The Venture must:

1. Be 51% owned by a Malaysian.
2. Have an accumulated profit of less than RM5million
3. Have a track record of less than 3 years.

Concessions

KTM Senior and Student 50% discount - Extended to Low Income Individuals

The KTM 50% discount for Senior Citizens and Students extended to all individuals earning RM3,000 per month and below in 2013. No news on implementation yet, but we can expect that as per Seniors and Students currently, you can apply for the card at KTMB offices around the country.

PTPTN Student Loan Concessions - 20% off for full repayment, 10% off for consistent payers

20% off PTPTN loan amount if fully repaid between 1 October 2012 and 30 September 2013.

10% off PTPTN monthly repayments for regular payees starting 1 October 2012, no missed monthly payments for 12 months.

To see our full PTPTN Article, including how much you can expect to pay and how much you can save, as well as Ujrah conversion information, click here.

Discount off Passport applications for Senior Citizens and Children Aged 12 and Below

RM150 and RM20 off Passport applications (RM150 from RM300 for 10 year, RM80 from RM100 for 2 year passports) for senior citizens and children aged 12 and below.

Other Vouchers / Rebates

RM250 Book Voucher for IPT students

The RM200 book voucher in Budget 2012 has been increased to RM250 in Budget 2013.

RM200 Smartphone Rebate Voucher for Low Income Youths

RM200 smartphone purchase rebate in 2013 for those between 21 to 30 and earning below RM3,000. For the full review on how to get it and what to look out for, check out our Youth Communication Package (PKB) 2013 review.

Not sure which smartphone to get? Why not check out our full Utilities and Phones section.

Freebies

Free Health Screening 2x yearly for all SOCSO (Perkeso) members

If you have contributed to SOCSO, you are eligible for this health screening at any government hospital of SOCSO panel clinic. To see our full review on SOCSO, its benefits, drawbacks and various other bits, check out our SOCSO in Malaysia article.

Free Mammogram for All Women aged 40 and above

Not much information here, will update when we get something!

Property Ownership

For the full analysis on Property and Mortgages in Malaysia, you may check out our Property and Mortgages section.

RPGT increases to 10% - 15% from 5% - 10%

Supposedly to curb property speculation, Real Property Gains Tax (RPGT) has been increased to 15% for properties disposed within 2 years of purchase and 10% for properties sold between 2-5 years of purchase. 0% RPGT for properties older than 5 years kept as it is. See the following table:

RPGT for IndividualsDisposals on Oct-95 to Mar-07Disposals on Apr-07 to Dec-09Disposals on Jan-10 to Dec-112012 Budget2013 Budget2014 Budget
Disposal in 1st year
30%
0%
5%
10%
15%
30%
Disposal in 2nd year
30%
0%
5%
10%
15%
30%
Disposal in 3rd year
20%
0%
5%
5%
10%
30%
Disposal in 4th year
15%
0%
5%
5%
10%
20%
Disposal in 5th year
5%
0%
5%
5%
10%
15%
Disposal in 6th year and beyond
0%
0%
0%
0%
0%
0%

To see full RPGT in Malaysia article, click here.

MMFH Income Eligibility Increases from RM3,000 to RM5,000 (RM10,000 for couples)

The Malaysia My First Home scheme was introduced last year, with many deriding the RM3,000 monthly income limit as too low for loan amounts between RM220,000 - RM400,000. The government has gone ahead and increased the monthly income eligibility to RM5,000 for individuals (RM10,000 for couples) which definitely makes more economic sense! Under this scheme, people can obtain 100% LTV / margin from financial institutions (vs. the usual 90% offered) where the 10% is guaranteed by the government.

50% Stamp Duty Exemption Extended to 2014 and Threshold Increased

To further encourage first time home buyers, the government is extending the 50% stamp duty exemption from Dec 31 2012 to agreements dated Dec 31, 2014 under Budget 2013.

The property price threshold to be eligible for this exemption will also be raised to RM400,000 from RM350,000. Given that stamp duty on a RM400,000 property is RM7,000, this amounts to a RM3,500 saving.

Where can I find out more about the Malaysian Budget 2013?

The Malaysian Budget 2013 was tabled on the 28th of September 2012 at 4pm.

You can also download the full text and reporting from the MOF website:

http://www.treasury.gov.my/

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