WHAT THE BUDGET MEANS FOR THE MAN ON THE STREET

The Sundaily

25/10/2015

PETALING JAYA: While the man on the street had something to cheer about when Prime Minister Datuk Seri Najib Abdul Razak tabled the nation’s budget for 2016 last Friday in the Dewan Rakyat, some were unhappy that there was not much in it for them.The abolition of Goods and Services Tax (GST) on prepaid card reloads brought smiles to millions of users.

Likewise, civil servants were happy that the minimum starting salary in the civil service is set at RM1,200 a month from July 2016 – a move that is expected to benefit some 60,000 civil servants.

“The adjustment has been long awaited by this group, especially those living in urban areas and those who have just started work, including youths,” Cuepacs president Datuk Azih Muda said, adding that Cuepacs was very satisfied with the salary adjustment.The minimum pension rate is set at RM950 a month for pensioners with at least 25 years of service.Additionally, a payment of RM500 for all civil servants and RM250 for Government retirees is allocated to help with cost of living.

However, many urban folk felt hard done by that the RM100 schooling assistance is now limited to those who earn RM3,000 and below.Some 4.7 million households will continue receiving the Bantuan Rakyat 1 Malaysia (BR1M) with a payout of RM400 to unmarried persons above 21 with incomes below RM2,000.A BR1M payout of RM1,050 is set aside for those with incomes below RM1,000 and RM1,000 (for those with incomes below RM3,000), RM800 (for those with incomes below RM4,000).

In terms of income tax, relief for each child below 18 years of age is increased to RM2,000 from RM1,000 from year of assessment 2016.The tax relief for an individual taxpayer whose spouse has no income is increased to RM4,000 from RM3,000 currently.Children supporting their parents, even if not living together with their parents, will get tax relief of RM1,500 (for the mother) and RM1,500 (for the father), if the parents are above 60 years of age.Parents of disabled children get RM6,000 tax relief and up to RM14,000 if their child furthers his or her studies.

The maximum tax relief on higher education fees for individual taxpayers is increased from RM5,000 to RM7,000 per annum.The 1Malaysia book vouchers will still be available for 1.2 million students.On the downside, those earning an annual income of RM600,000 to RM1 million will see their taxes increased from 25% to 26% whereas those who earn more than RM1 million will have it increased to 28%. Also, the Federation of Malaysian Manufacturers (FMM) is of the view that more should have been done in this budget to spur the manufacturing sector as it is a major sector in the economy contributing to the growth of gross domestic product and exports.

“We had hoped for more incentives to accelerate the move towards high value and high-tech manufacturing activities. The last time the sector benefited from a major incentive was in 2008,” it said in a statement.Themed “Prospering the Rakyat” the budget sees plans to narrow budget deficit and also address the rising cost of living.