•

•Professional qualification: Bac. Accounting and Management Control, FCCA, CFP, CA

• Ex-Deloitte Kassim Chan as Senior Tax Consultant and Senior Auditor

• Have served MNC clients such as Fajar Group, Lion Group, Triumph International, Arab Malaysia Bank etc

•Specialized in Corporate Financial Planning, Tax & Accounting Analysis, Funding Proposal, M&A and IPO consultancy

CFP, FCCA, CA

Ching Chee Pun

Who will benefit most from Budget 2018?

Contains

• World Economy• Malaysia Economy• Transportation, Education, Tourism, • Sport Digital Free Trade Zone • Entrepreneur, SME • Government Servant Personal • Woman • Housing• Others • Where the money come from?• Summary

World Economy

2018

• USA Interest hike • China Economy Recover? • Middle East • Oil Price Stable (USD66) (if Oil price increase, Malaysia good

too)• Global economy is expected to grow by 3.6% this year to

3.7% in 2018

2018 Malaysia EconomyEconomic Performace

• 2.8% Fiscal Deficit (2017 : 3% Fiscal Deficit) (21 years continues Deficit) (RM39.8B) (cant hit 2020 vison to zero)

• 5% - 5.5% GDP (2017 : 5.2% to 5.7% GDP) (Half year 2017 already hit 5.7%)

• Income Per Capita RM42,777 (2017: RM40,713)

• Internatioanl Reserves : RM428.7b (as at 13 October 2017)

• Unemployment: 3.3%

• Inflation: 2.5 - 3.5%

• SME can contribute 41% of GDP.

● GST RM3.8b (2018), RM27b (2015), RM38.5b (2016), RM41.5b (2017)

● Three international credit rating agencies rate Malaysia's credit rating of "A-" and stability.

● Country Debt RM685B, (2017 651.4) (increase debt by RM33.6B) (53% of GDP)

2018 Malaysia Economy

• Revenue: RM239.86B (2017 : RM219.7B) (increased by 6.4%)• Expenditures： RM280.25B (2017 : RM265.9B) (increased by 5.4%)

• (income tax 42.6%, Indirect Tax 22.8%, Loan 14.4%, Non Tax 17.2%, Others 3%)

• 2018

• Operating Expenditure: RM234.25B (83.6%)

• Allocate for Government Servant Salary : RM79.1B (2017 : RM77.4B)

• Development Expenditure: RM46B (16.4%)

• 2017

• Operating Expenditure: RM219.9B (82.7%)

• RM77.4B allocate for Government Servant Salary

• Development Expenditure: RM46B (17.3%)

• RM11B under Prime Ministry Department

2018 Malaysia

Summary

• Government Servant: RM79.1B (2018) 33.7% , RM77.4B (2017) 35.2%

• Operating Expenditure: 83.6% (2018), 82.7% (2017), 80.5% (2016)

• Developing Expenditure: 16.46% (2018), 17.3% (2017), 19.6% (2016)

2018 Malaysia Economy

• RM depreciated 40% to 50%

• Country Debt 51% against GDP in 2016

• Country Debt reach 53% against GDP in 2017

• In 2018 , sure will maintain below 55%

• Government Guarantee is 15% since 2013

Transportation2018

●MRT2 Project Sungai Buluh-Serdang-Putrajaya (52km): (RM32b)

●High Speed Rail Project connecting Kuala Lumpur – Singapore (350km);

●Transportation Development Fund: (RM3b)

●Public Transportation Fund for working capital and procurement of buses and taxis: (RM1b)

●Upgrade of Pulau Pinang and Langkawi International Airports;

●Upgrade of airports at Sultan Ismail Petra, Mukah and Sandakan

Transportation

2018

●Batu Tiga & Sg Rasau (Selangor), Bukit Kayu Hitam (Kedah) & Eastern Dispersal Link (Johor) tolls will be abolished.

Free Trade Zone:●Pulau Pangkor will be a new Free Trade Zone (except for Tobacco, cigarettes and vehicles) ●Upgrading of Free Trade Zone of Bukit Kayu Hitam.

Education2018

●The government will allocate RM2.5 billion to repair schools by using the Industrial Building System (IBS) within two years, RM500 million for West Malaysia and RM1 billion for Sabah and Sarawak respectively。

●A total of RM550 million was allocated to the school maintenance and improvement fund, including RM250 million for the Chinese Primary school, Thai Primary School, Church, School Hostel, Mara Science Primary School and Government Subsidy Religious School respectively. (RM50m) each)

●The government allocates RM328 million to help low-income students, benefiting 3.2 million students nationwide (RM100 per person)

●University Student and Form 6 students will receive RM250 worth of coupons, which will benefit 1.2 million students

Education

2018

●Government University will receive a special donation of RM400 million for research and development in helping local universities, especially Malaysia University, to be the top 100 rangkinguniversities in the world.

●Low-income students will have an additional loan of RM2 million

●The discount period for PTPTN will be extended from the end of this year to Dec 31, 2018.

●Grace period of 12 months instead of current 6 months after graduation for loan repayment.

●Increased maximum loan for students from B40 families.

Agricultural

2018

• Financial assistance RM6.5b to farmers, rubber tappers, smallholders and fishermen:

• Upgrade plantation roads and improve irrigation infrastructure: (RM500m)

• Developing and replanting for oil palm: (RM140m)

• Agricultural programmes as new sources of income: (RM200m)

• Coconut replanting (CARECA and MATAG) by cluster: (RM50m)

• Financial assistance of RM200 for 3 months prior to paddy harvesting season: (RM150m)

Tourism 2018

• Visit Malaysia Year 2020

• SME Tourism Fund with interest subsidy of 2%: (RM2b)

• Tourism Infrastructure Development Fund: (RM1b)

• Tourism promotion and development programme: (RM500m)

• Expand eVisa Regional Hub：

• Tax incentive for investment in new 4-star and 5-star hotels extended for 2 years;

and• Tax incentive for tour operating companies extended to 31 December

2020

• Listing Pulau Pangkor as tax free island, except for alcohol, cigarettes, motor vehicles

Tourism

2018

• New airport in Tioman is being planned

• Special tourism healthcare incentive increase to 100%

• RM120m loan to one Malaysia mobile vehicle restaurant

Sport

2018

• Allocation of RM1 billion to the sports sector, including Healthy Malaysia (FitMalaysia), National Sports Day, athlete training, youth training program and national football development plan

Digital Free Trade Zone (DFTZ)

2018

●Construction first phase of DFTZ in Aeropolis, KLIA: (RM83.5m) ●Increase de minimis value or minimum value for imports from RM500 - RM800. ●Principal hub tax incentive extended to 31 Dec 2020

Free Trade Zone:●Pulau Pangkor will be a new Free Trade Zone (except for Tobacco, cigarettes and vehicles) ●Upgrading of Free Trade Zone of Bukit Kayu Hitam.

Digital Free Trade Zone (DFTZ) 2018 • The current global entry into the industry 4.0 and the digital economy

era, the Chinese government will also strive to implement the Malaysian digital policy, and in the domestic investment strategy fund allocated RM255 million to enhance the smart manufacturing equipment to support the development of industry 4.0.

• Cyberjaya Futurise Centre and expansion on regulatory sandbox to elevate innovation

Digital Free Trade Zone (DFTZ)

2018 • Tax Incentives

• Extend the incentive period for Accelerated Capital Allowance on automation equipment 2018-2020

• Accelerated Capital Allowance Incentive up to 200% for manufacturing and manufacturing-related-services sectors

• Capital Allowance Incentive for ICT equipment beginning 2018-2020

Entrepreneur/ SME

SME Financing (2018)

•Skim Jaminan Pembiayaan Perniagaan for working capital and services sector: (RM7b)

•Government Guarantee loans under SJPP to enable SMEs to automate production: (RM1b)

•Shariah-compliant SME Financing Scheme with subsidy rate of 2%: (RM1b)

•Soft loans, grants and training programmes for SME under SME Corp: (RM200m)

Entrepreneur/ SME

SME Financing (2018)

•Development of halal industries and products under various agencies: (RM82m)

•RM1.5 billion for commercial lending purposes, using intellectual assets as collateral and providing up to 80% of credit

Entrepreneur/ SME

•Mirco Financing (2018)

• Loan fund under Tabung Ekonomi Kumpulan Usahawan Niaga (TEKUN): (RM500m)

• Amanah Ikhtiar Malaysia (AIM): (RM200m)

• Rural Economic Financing Scheme (SPED) for rural Bumiputera entrepreneurs:RM80m

•RM1bil funding for venture capital investment

•RM50m to Kojadi

Entrepreneur/ SME

•RM100m to Mdec for Start up Social Program

•RM120m loan to one Malaysia mobile restaurant

•RM5000 allowance to buy New Car to start business in Grab

Entrepreneur/ SME

• High-impact strategic fund under MIDA: (RM200m)

• Matching Grant under Domestic Investment Strategic Fund to enhance smart manufacturing facilities: (RM245m)

( 2017 : Allocate to MIDA for RM522m for incenties & grants )

• Green Technology Financing Scheme to promote investment in green technology industry: (RM5b)

Entrepreneur/ SME/ Startup

My View

• P2P / Crowd Funding

• Equity Financing + IPO Program

• SME Listing Board

• Rehabilitation Scheme

Entrepreneur/ SME/ Startup

My View Problem

• SME lack of funding• SME lack of good manpower (rely on foreigner)• Cost of doing business increase • RM depreciate lead to Cost increase• Threat of Alibaba • Lack of Export• SME Grants why difficult because 1) Paper work weak 2) Government

Servant not helpful 3) Lack of A&P to promote

Entrepreneur/ SME/ Startup - pre

My View

Action

Reduce levy Reduce import duty

Go Automation SME must prepare themselve

one belt , Asean ..middle east...etc...a lot of market governmet servant must act consistent to the top plan

Export

2018 Encourage Export

• Export promotion programmes: RM150M provided through National Export Promotion Funds (2017 : RM130M)

• Loans to enhance automation of local furniture production for export: (RM100m)

• Insurance coverage credit facility for SME exporters: (RM1b)

• In 2017, Export of palm oil, rubber, cocoa and pepper: RM286M allocated to increase exports (But not in 2018)

Public Servants, Senior Citizen, Disable Person

2018

• Earlier 1 hr Time Off for Expecting Parents in Govt Sector.

• Bonus of RM1500 for Govt Servants.

• Bonus of RM750 for Govt Pensioners.

• Increased allowance to Senior Citizens from RM50 to RM350.

• Increased allowance to Person With Disabilities & Caretakers of PWD by RM50 per month.

Public Servants

My View

• Government servant number 1.6m • For the past 10 years government servant increase 60%• Expect one and half month bonus in 2018

Ratio : - Malaysia 19.37 to 1 (included teacher and army)

Singapore 71.4. to 1 Indoneasie 110 to 1 China 108 to 1 Japan 128 to 1

Individual

2018

• Personal Income Tax (By right after GST, should reduce automatically)

• Reduction in individual income tax rates:

● RM20,001-35,000: 5% to 3%;

● RM35,001-50,000: 10% to 8%; and

● RM50,001-70,000: 16% to 14%;

• Reduction of 2% tax for those income below RM70,000. • An estimate of 261,000 ppl would not be paying tax.• Tax exemption for rental income of 50% up to RM2000 per month.

Individual

2018

• BRIM of RM1200 to deserved individuals.• BR1M- 7Million recipients with allocation of RM6.8B

2017 • 1.E-Kasih- From RM1,050/ RM1,000 increase to RM1,200• 2.Households earning between RM3,000 to RM4,000- RM850 increase to

RM900• 3.Single earning below RM2,000- RM400 increase to RM450

Individual

Note

2017 and 2018 • BR1M- 7Million recipients with allocation of RM6.8B

• BRIM still to those working in Singapore but no register in malaysia

2012 2013 2014 2015 2016

BRIM 21亿 30亿 45亿 52亿 59亿

人数 420万 680万 790万 720万 740万

Women

• Woman entrepreneur comprise 20.6% in the SME Entrepreneur

• Mandatory maternity leave for private sector increased to 90 days.• 30% women representation requirement as Board of Directors in GLC by

end of 2018

• 12 months Tax exemption for income for women re-etering workforce.(After at least 2 years of work break)

• SSP1M Education Tax relief will continue for the next 3 years.

• Childcare facilities for new buildings (start from KL)

GST

• Services provided by local authorities will not be subjected to GST;

• Reading materials comprising all types of magazines and comics will be zero-rated;

• GST relief for cruise operators;

• Full GST relief for services of construction of school buildings and houses of worships funded through donations;

• GST relief for imports of oil and gas-related equipment under lease agreement;

• GST relief for imports of big ticket items such as aircraft and ship by airlines and shipping companies; and

• Management and maintenance services of stratified residential buildings are not subjected to GST.

Affordable Housing - 2018

Note

• Rent First, Buy Later • EPF Account 2 for 40% withdrawal • DIBS open to First Time Buyer (less than 500K below and

cannot resell within 5 years; if not penalty) • Should lower the RPGT and Stamp Duty to boost market• Relaunch MyDeposit • Family income less that RM10k and house value less than 500K

for FIRST time buyer, special scheme (HOAP) • Give Subsidiary to IBS • Offer higher limit to foreigner • Higher loan limit to 3rd house

Others -2018

• Allow employers to hire foreign domestic helper directly without agent

• Bonus RM1500 special assistance to Village Head.

• RM75mil for Development & Restoration of Chinese New VIllage

• RM65 million to the development of Chinese village, another RM10 million as a house maintenance costs

• Each Malaysian child born from Jan 1, 2018 to 2022 will be given RM200 worth of units in unit trust Amanah Dana Anak Malaysia 2050 (Adam50).

Where the Money come from?

• Airport tax

• Hotel room tax

• Foreign workers' levi tax (2 million foreign workers are registered and 7 million are not registered)

• Rehiring plan for foreign workers

• Anti cigarettes and smuggling activities

• Tax Audit (Inland Revenue Agency and GST )

• 2017 Penalty up to 100% (Tax audit); Current 45% only

World Economy

2018

●USA Interest hike●China Economy Good back? (If yes..Malaysia good too)●Middle East - IS

•Oil Price Stable (USD57) (if Oil price increase, Malaysia good too)

Where the Money come from?

• Reduce Petroluem Tax (2016 13.5% of Total Collection)

Increase GST (2016 19.4%) Company Tax (2016 27.4%)

• Think cannot reduce government servant salary , so need to increase Tax income

• Tax Audit will focus on Business in Oversea

• GST will impose those Internet Marketing which doing online business

Where the Money come from? 2018

• IRB and Custom VERY efficient

• Tax Audit and Tax Investigation (EXTRA PORTION)

2015 : 9.8B 2016 : 6.378B 2017 : 6.148B Total 22.4B

GST• GST 43.8b (2018) GST RM27b (2015), RM38.5b (2016), RM41.5b

(2017)

• Expenditures: RM280.25B (2017 : RM265.9B) (increased by 6.5%) (income tax 42/6%, Indirect Tax 22.8%, Loan 14.4%, Non Tax 17.2%, Others 3%)

Conclusion

Wealth Creation

Q & A

2018 Malaysia Economy

• External trade• Gross exports: 3.4%• Forex (USD/MYR): 4.34 • Unemployment: 3.3%• Inflation: 2.5 - 3.5%

● Promote investment, trade and industry. Domestic investment is expected to increase to 6.7%, next year's private investment will exceed 260 billion ringgit.

● The theme is to promote inclusive economic prosperity, balance the religion and secularity for the well-being of the people, and move towards the 2050 National Transition Plan (TN50)

World Economy

2018

●USA Interest hike●China Economy Good back? (If yes..Malaysia good too)●Middle East - IS

•Oil Price Stable (USD57) (if Oil price increase, Malaysia good too)

Agricultural

2018

• Rubber replanting programme and infrastructure to increase production of latex: (RM200m)

• My View : Youth can explore enter into agricultural indsutry

Others - 2018

1. RM344 million as a rural development plan, including nearly 500 million grants to Sabah and Sarawak. Allocated 6,272 million as a supply for electricity, including 620 million as Sabah and Sarawak two states of rural areas to provide electricity for 100,000 homes

2. Budget boost to combat extremism; more homes to be built for police and military.

3. The government to ready RM2 billion as an emergency reserve

4. Government grants 3.9 billion as price and transportation allowance, including gas, flour, edible oil, electricity allowance and tolls

拨款39亿作为物价与交通津贴，包括煤气、麵粉、食用油、电费津贴与过路费。 拨款39亿作为物价与交通津贴，包括煤气、麵粉、食用油、电费津贴与过路费。

Affordable Housing 2018

PROJECTS UNIT AGENCIES

• People’s Housing Programme (PPR) 17,300 JPN• Rumah Mesra Rakyat 3,000 SPNB• PR1MA 210,000 PR1MA• PPA1M 25,000 JPN• MyBNHomes 600 NSU• MyDeposit & MyHomes 2,000 JPN

Affordable Housing 2018

• Maintenance and refurbishment of houses including 1Malaysia Maintenance Fund: (RM200m)

• Stamp duty exemption for loan agreement and letter of consent to transfer

• Tax exemption on rental of 50% for rent up to RM2,000 (a lot of people no declare)

Affordable Housing - 2018

• As at 30 June 2017, Lower Cost Housing Project = 184 (118 completed); provided 83380 houses. Local government also spend RM12b to build 130k to 180k low cost house

• Government projects • Rent to Own (Subsidy 120,000 per unit) • Youth Transit Home (Rent below 20% to 30% market value

for 5 years)• SPP (provide RM60,000 to build house on his own land,

since 1979 got 6122 owner benefited , total amout is 188,500,000 (188m)

• My Home (subsidy up to 30,000 unit per FIRST buyer) • My Deposit (1451 FIrst time buyer benefited) • PRIMA• PPA1M (for government servant only)• RUMAWIP (local government project)