Budget 2018 - Prospering an inclusive economy towards TN50

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Budget 2018 was tabled in Parliament on 27 October 2017. Themed 'Prospering an inclusive economy towards TN50', this year's Budget focused on stimulating domestic investments, developing future generations and enhancing the well-being of the rakyat, including improving inclusivity. How will this affect you and your business? We share key highlights from the Budget, insights from our tax experts, related publications and more.  

 

Key highlights

Well-being of the rakyat

Personal income tax

  • Reduce tax rate for chargeable income bands between RM20k to RM70k; savings between RM300 to RM1,000


Women welfare

  • Maternity leave for private sector increased to 90 days
  • Women returning to work after 2 years exempted from income tax for up to 12 months
  • Childcare facilities for new buildings
  • Employers can hire foreign domestic helpers directly  


Human capital 

  • GLCs to increase profit sharing with employees, offer more flexible work benefits and arrangements


Affordable housing

  • 50% tax exemption for rental income RM2k & below per residential home per month
  • Additional 210,000 PR1MA housing units


Youth development

  • PTPTN discounts extended until 31 Dec 2018
  • Extension of grace period for loan repayment  

Invigorating the economy

Boosting digital economy and high tech sector

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


Promoting regional hub

  • Principal hub tax incentive extended to 31 Dec 2020


Developing tourism

  • Special tourism healthcare incentive increase to 100%
  • Tax incentives extension for investments in hotels and tour operators to 2020


Funding for SMEs

  • Includes loans for automation, insurance coverage for exports, tourism funding (amounting to RM4.2bil)


Capital market investments

  • RM1bil funding for venture capital investment


Lowering cost of business

  • Certain GST relief such as handling services rendered to cruise operators, importation of aircraft, ships and oil rigs
  • Services provided by local authorities not subject to GST 

Outlook for 2018

Sustained growth ahead

  • Gross Domestic Product: 5.0-5.5%

led by:

  • Private consumption: 10.0%
  • Construction: 7.5%
  • Services: 5.8%     
  • Manufacturing: 5.3%


Fiscal performance

  • Government revenue: +6.4%
  • Government expenditure: +6.5%
  • Fiscal deficit (as % of GDP): 2.8% 


External trade

  • Gross exports: 3.4%
  • Forex (USD/MYR): 4.34 


Other key economic indicators

  • Unemployment: 3.3%
  • Inflation: 2.5 - 3.5%
Note: For more information about the key tax proposals of Budget 2018, read TaXavvy Budget 2018 Edition listed below.
 

Explore

 

GST 2go Podcast Series


Staying up-to-date on GST

Have you got the hang of the GST rules and how they apply to your business? Listen to our tax experts as they share their perspectives on things you should consider when complying with the GST rules.

Learn more

Blog: Our Perspective on Tax

Recent event

8 November 2017

Budget 2018 Seminar: Forging ahead

A one-day event where our tax specialists discussed the key points of Budget 2018 and their impact on the tax landscape.


 

 

 

Related research and insights

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