tOm@kO's life ~*_*~

a lot of people is waiting for some sweetener distributed during the so called mini budget.

so the box was opened today.
and some of the sweetener are as follows:-

1. subsidies to avert price increases of necessities such as sugar, bread and wheat flour
2. subsidies to ensure that toll rates are not increased.
3. house buyers be given tax relief on interest paid on housing loans of up to RM10,000 a year for three years.
4. additional allocation to repair and maintain drains and roads, and improve the surroundings of public flats to ensure more comfortable living conditions (yes judging by the recent flash flood in KL and Johor i think this is a must for the government to take action)
5. Issuance of syariah-compliant Savings Bonds with a maturity of three years and an annual return of 5% (3% higher than the current FD rate leh!!) and will be paid quarterly to bond holders. (but how many of this bond would be entitle to us before they are being swipe clean by the "related parties" and "connected parties" with the bank leh?)Anyway, the bonds are available to all citizens aged 21 and above, with a minimum investment of RM1,000 and a maximum of RM50,000.
6. Existing tax exemption of RM6,000 given on retrenchment benefits be increased to RM10,000 for each completed year of service.
7. Employers who hire workers retrenched from July 1 2008 be given double tax deduction on the amount of remuneration paid. The amount of remuneration eligible for this deduction shall not exceed RM10,000 per month for a period of 12 month
8. More job at government agencies.
9. Malaysians would also be encouraged to pursue Masters and PhD courses. The Government will undertake to finance tuition fees and research grants of up to RM20,000 for every student pursuing a PhD locally. (yeah it's a good time to study when you got retrenched)
10. Permanent resident status would be considered for high-net-worth individuals bringing more than US$2mil for investments or savings in Malaysia. (I think Andy Lau can bring all his money into Malaysia and Malaysia would welcome him as son-in-law as well as a PR in Malaysia). Highly skilled foreign professionals may also be considered for permanent resident status.
11. Company’s current year losses be allowed to be carried back to the immediate preceding year. The treatment will improve the company’s cash flow compared with the current tax treatment. Total losses to be carried back is up to RM100,000 per year. The tax treatment is applicable for year of assessment 2009 and 2010. (This is a very new treatment introduced. first time in Malaysia, but i do not know about other country. But i think the IRB has done a good job as in providing the guideline on how this thingy works. to expect more discussion and meetings on this issue. to expect more job to come in. to recheck on companies which are making profits and expect to make loss soon.)
12. Retrenched workers are able defer the repayment of their housing loans for one year. Interest income related to the deferment of housing loan repayments be taxed only when such interest is received by the financial institution.
13. Auto-scrapping scheme for PROTON and PERODUA. Discount of RM5,000 will be given to car owners, who trade in their cars, which are at least 10 years old, for the purchase of new PROTON or PERODUA cars. The Government will finance part of the discount borne by PROTON or PERODUA.
14. Expenses incurred on plant and machinery be given Accelerated Capital Allowance, which can be claimed within 2 years. This treatment is applicable to investments incurred between 10 March 2009 and 31 December 2010. (interesting... more job more planning to do?)
    
15. Expenses incurred on renovation and refurbishment of business premises between 10 March 2009 and 31 December 2010 be given Accelerated Capital Allowance, which can be claimed within 2 years. The Allowance is capped at RM100,000. (interesting... more standard letters to be prepared?)

so..

how much will the people benefit from this mini budget?
i guess what i see is more tax planning opportunity ahead.
or you can buy your own house with your daddy's money now
and get some savings from the interest that you paid for
or you can get yourself retrenched...
and ask your potential employer to pay you a high high salary cap at RM 10k
and your potential employer can claim double the deduction of your salary cost.

yeah.. the DPM aka FM1 announced the new economy stimulation package..

but the thing i most concern is about the interest deduction.
so DPM says

Currently, investment sentiment in the housing sector is weak, given that both developers and buyers appear to be adopting a cautious attitude to build and to own houses. Therefore, to stimulate the housing sector, the Government proposes that house buyers be given tax relief on interest paid on housing loans up to RM10,000 a year for 3 years.

so when you are thinking wow.. this is good news and
i just bought my first house last year.
so i would be entitle to the deduction?
please see the following T&C applies..

1)house must be purchased from developer or third party
2)tax payer is a Malaysian citizen and a resident (so if you stay in Singapore and you are not a Malaysian tax resident you might not entitle to the above benefit. maybe it does not make any difference to you since you might not be taxable in Malaysia.)
3)limited to one residential house including flat, apartment or condominium
4)sale and purchase agreement is executed between 10 March 2009 and 31 December 2010. (meaning you sign the S&P on or after 10/3/2009. but how about those lower income group who have purchase the house earlier? and what if they loose their job now?)

DPM say :-

The Government is cognisant of the problems faced by retrenched workers in repaying their housing loans. To assist them, banking institutions have agreed these retrenched workers defer the repayment of their housing loans for one year.

Nevertheless the tax deduction is given for 3 consecutive years from the first year the housing loan interest is paid and is effective from year of assessment 2009.

So after concluding all the T&C above do we fall under the above categories?
the answer is no.
so the above proposal is not beneficial at all.
maybe should expand the scope to people who bought their houses since 1/1/2008 (ya i fall under this category) and extend the time period up to 5 years? or expand the house price up to 350k?
but to me the proposal have too little benefit on myself.
so nothing much excites me.