StockTube is determined to update as fast as possible the summary of the main ingredients of Budget 2008 as it broadcasted here. This entry will be updated continuously. So here you goes:

• Corporate tax reduced to 25% in 2009 (26% for 2008 remains)
• Single-tier tax system – profits are only taxed at the company’s level and dividends received are exempted from tax.
• All professionals and consultants required to pay service tax.
• Foreign ownership on fund management companies and REITs will be allowed up to 70%, with minimum Bumiputera ownership requirement at 30%.
• For the purchase of house of not more than RM250,000 per unit – a 50% stamp duty exemption on documents of transfer.
• Text Book Loan Scheme will be provided to all students – irrespective of their families’ income. Annual fee for primary and secondary schools will be abolished.
• Primary and secondary Chinese and Tamil schools – income tax exemption (yeah right, as if these schools are making tons of money now). How about private education or colleges of which most of the non-Bumiputras acquire their training and education?
• Tax relief of up to RM5,000 on education fees to all post graduate studies.
• Effective 1st Jan 2008, EPF contributors are allowed to make monthly withdrawals from the balance in Account 2 – for the financing of one house (the quantum is not known though).
• RM677 million is provided for training 110,000 youths under the National Service Training Programme – no wonder the authorities do not care despite numerous death occured to the youths. The program is simply too lucrative.
• Individual tax relief of up to RM300 a year be given on the purchases of sports and exercise equipment – does this includes slimming equipments *grin*?
• Internet trading and cash upfront transactions will be fully negotiable. Clearing fees be reduced to 0.03% from existing 0.04% with a maximum fee of RM1,000. Minimum broking charges per transaction will be fixed at RM40 from RM12 previously (effective 1st Jan 2008)
• The worst part – NO PERSONAL INCOME TAX CUT? Well, I’m sure you guys who are tax-payers out there are not going to like this. Does this means the government doesn’t needs your votes?

Conclusion – Except for the monthly EPF deduction of which the quantum is still in grey area, this budget would be more bias towards trying to attract businesses especially Islamic financial services and insurance. No doubt it’s a short, simple, unexciting and no-brainer budget (don’t you pity Badawi who had been coughing non-stop during the presentation) without much meats to the people on the street.

And based on the wish-lists collected from FinanceTwitter’s readers via poll, most of your wishes won’t come true. You will still have to pay top dollars for private medical cares (unless you want to rush and queue with others at government hospitals), spend tens of thousands of dollars for basic education in private colleges simply because the government quota system says you’re not eligible (but you can be assured of university seat overseas) and no increase in relief for your kids or wife(s). Maybe the government’s pocket is too tight this time.

# NOTE: Government will be spending RM176.9 billion for fiscal year 2008

# Update: Deputy prime minister Najib hinted that not “ALL” must be announced during the budget. At the same time during the questionaire session with journalist broadcasted at 8pm news, Najib also hinted the civil servants might get their bonus when the time is “right”. If you smell rats, that’s because the bonus might be the carrot to be given a week or two before the general election date is announced. So watch out for the bonus announcement as it gives indication to the date of the coming election.

Other Articles That May Interest You …

• Budget-2008 – Poll Result and what you might Get
• Pre-Budget 2008 – What’s your wish? Take a Vote
• Budget 2007 with New Tax on Everything – GST
• More Signs General Election is Nearing

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September 7th, 2007 by financetwitter

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