Economic Highlights Of 2017 Budget

Bernama Online (English)

21 October 2016

ECONOMIC HIGHLIGHTS OF 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 Rakyat," tabled by Prime Minister Datuk Seri Najib Tun Razak in Parliament today.

  • Total budget allocation RM260.8 billion, 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 bln 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 pct, 2017 4-5 pct.
  • 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.
  • Govt 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 RM200 million from the Working Capital Guarantee Scheme (WCGS) Fund will be specifically allocated to startups.
  • To encourage investment in high technology startups, a new pass category, namely Foreign Knowledge Tech Entrepreneurs will be introduced.
  • Kelana Jaya and Ampang LRT lines commenced operations in June 2016.
  • The Sungai Buloh- Kajang MRT line will operate in December 2016, benefitting 1.2 million users in Klang Valley.
  • Implementation of East Coast Rail Line project connecting Klang Valley to the East Coast is phases at an estimated cost of RM55 billion.
  • A sum of RM100 million allocated to restore the East Coast railway line along Gua Musang - Tumpat that was destroyed by flooding.
  • 10 more new ETS train sets will be purchased in stages up to 2019, with an overall allocation of RM1.1 billion.
  • A sum of RM222 million for water treatment project in 42 Orang Asli villages, economic and entrepreneurship development programmes and Village Resettlement between Sungai Ruil, Cameron Highlands, Pahang.
  • A sum of RM100 million to SME Bank to increase opportunities to Bumiputera entrepreneurs.
  • A total of RM100 million to AIM for their various entrepreneurship programmes.
  • 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 entreprenurships.
  • 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.
  • Total budget allocation RM260.8 billion, 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 bln 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 expects to achieve 3 pct fiscal deficit in 2017.
  • GDP growth in 2016 4-4.5 pct, 2017 4-5 pct
  • 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.
  • Private investment is expected to expand 8.1 pct to RM230 bln 2017

- BERNAMA

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