1. I believe the artificial euphoria after Malaysian Budget 2010 announcement has finally settled. The ritualistic annual event followed by the ritualistic media reaction and selective public interview that followed every budget announcement has not left any long term impact on Malaysian.
2. Those who are concerned now realized that it was merely a publicity stunt and we are living in a real world surrounded by fantasy that was created by the government. I wonder how many men in the street really know how bad the budget would be for them. My own assessment is that the 2010 budget lacks imagination and creativity. It is not addressing the focus issue at stake which is the rakyat.
3. It is not addressing the need to ensure that the Malaysian purchasing power stays strong. Instead it is doing the reverse. One such example is the government plan to remove all fuel subsidies in 2010. Let us look at some of the areas of the budget. Since the scope of the Malaysian budget is too wide for me to comment. Therefore, my view will cover certain areas only.
4. Firstly, I welcome the annual fee credit card charge of RM50 per credit card. Malaysian has just too many cards and they are just creating a lot of debt. Many Malaysians survives their day on borrowings. We must ask accept that Malaysians has become too dependent on credit card because cost of living has gone up, our value of currency has gone down and the income growth has not been comparable.
5. Most family budget shows a monthly deficit. We are in what we are today, because the government has failed to keep cost down and improve the wealth of the average Malaysian. Whether we like it or not, Malaysian needs to try to live within their means. If they can’t, then they must blame those who created the problem for them. They should have no more than 1 card. As such, exemption should be given for the first card because, most people now uses card for daily transactions.
6. I was appalled with the idea of setting up 1-Malaysia clinics. Health services are the responsibility of Ministry of Health. They have been setting up hospitals and clinics on regular basis. I believe they will continue to do so base on their planning. The government primary feeder clinic and secondary centers need serious upgrading in terms of manpower, quality and service. It does not need a new signboard that says “Klinik 1-Malaysia” This is a sheer waste of public funds.
7. I have written before about the impact of oil fluctuation. In Malaysia, when petrol goes up by 10 sen; everything goes up by 10 sen a kilo, a can or a piece or a glass. I think everyone knows what I meant. The government will shout and says that businessman should not be too greedy and government will control. In actual fact they don’t and do not have the ability to do so.
8. We live in a country where whenever the oil price goes up, everything goes up but when oil went down, everything stays the same. Oil is the base of all cost and the moment oil price goes up, Malaysian will not only be burden with fuel increase but with everything that sits on the shelves in the supermarket. If subsidy is removed, I believe Malaysian lower middle income will fall under the poverty line. Bread winners may have to end up doing two or three jobs.
9. I expect the government to find measures to stabilize the pump price. They should develop an “Oil Stabilization Fund” (OSF). This fund will be used to pay the fuel subsidy. In the event that the world oil price drops, then excess income from petrol sales will go into this fund. The point I am making is that, we need to have a stable petrol price. OSF is one way of doing it as with instability of oil price it will create more hardship for the people.
10. The government has also shown very little creativity in improving the nation income and its expenditure. Its revenue is too dependent on fixed salary income earners, business taxes and GLC dividends. The fixed salary income earners is the one that the government knows cannot cheat on their income and the government continues to milk them every year despite the shrinking numbers of middle income earners.
11. My assessment shows that a family 4 living in major city would be struggling with annual chargeable income from RM2501 to RM 42,000 a year (or below RM3, 500.00 a month). This group tax rate varies from 1% to 12% or from RM25 onwards. Is our government so hard up that they need to collect RM25 from the lowest rung of the society? I think the cost of doing the collection and maintenance of the accounts is higher than the collection. In my opinion, those with chargeable income of below RM3500 a month should not be paying any income tax. There is just too much hassle in the collection and maintenance of this collection.
12. Instead we see that the government reduces the income tax of those groups with taxable earning of RM250, 000 and above. It appears those who earn more than that like RM 1 million a year will be laughing to the bank. The 1% is equivalent to RM 10,000 a year. This group will use the money and go and spent it overseas. The RM10, 000 is equivalent to 400 people paying RM25 per year. That is why I said the government lack imagination.
13. It is to redefine the level of poverty, the lower income group, the middle and the upper income group. A new tax structure needs to be put into place. The tax structure for those with chargeable income above RM42, 000 to RM250, 000 needs to be reduced on a structured scale and several new tax brackets is created for those with chargeable earning above RM250, 000. Those earning more than RM 1 million a year need to pay a lot more. The government also needs to introduce a regime called “Tax At Source” (TAS) which is specifically targeted those in the high income bracket.
14. Among others TAS can be implemented to those who profited from stock market. In Europe the prevailing tax rate is 25% on the profit. TAS should also be aimed at those who earned on fixed deposit as only those with spare cash puts money in the FD. Some exemption can be given to retirees. Other source of TAS includes air tickets cost for international travel, tires for big cars and many more consumable items that is usually purchased by the rich. This is not equivalent to GST. The government also needs to improve its tax collection from businesses which typically under declare their income.
15. No matter how much we collect, if we do not manage our expenses appropriately, no amount of money is enough. The government needs to reduce its cost of procurements. For e.g. despite being the largest purchaser of paper and ball point pens, we are still paying more than what a person would be paying for buying 1 unit of such item at the hypermarket. I shall not dwell into the excessive commission that involves major government procurement because it is well documented on the public domain.
16. My conclusion of this budget is that it is making Malaysian poorer. It is squeezing the lower and middle income group. It does not address the core issue of improving the quality of life of Malaysians. The rich and superrich will ends saving more money with their 1% tax reduction. I don’t understand this government that says peoples first.
Reference
Malaysian Medical Association comment on 2010 budget allocation for the health care sector
I AM SICK AND TIRED GUYS……………
ALL NONSENSE FROM BN AND UMNO
HIGH TIME THEY GET KICK OUT
More negatives than positives in budget for me. Please don’t call people’s budget. It is NOT.
Most people do not realize that the Budget 2010 recently announced is just an estimate. Next year Najib will be spending money not allocated for in the original budget. This will be in the form of a “Supplementary Supply Bill” tabled in parliament. Sometimes the bill is tabled AFTER the money has been spent. These bills are usually not noticed by the public and not given much prominence in the media.
It’s a fact that when a baby is born, doctors slap it to make it start breathing, but in rare cases like you, when born, doctor slaps himself !.
Pelangisenja
what do you mean exactly.. please speaks plainly
drrafick,
it is a plain joke, it does not carry any ill feeling or directed to anyone.
*please remove the joke if it create the wrong feeling*
Trust this clarifies.
an amno cybertrooper..as usual, if they can’t argue ur point, they’ll make stupid joke…
pelangisenja,
After posting such a nasty comment…., you just claim it was meant as a joke……, you must be a sick UMNO cybertrooper….., who deserves something shaft down your rear.
dear Balasi,
In name of God,I don’t mean any amount of nasty thing in that simple joke. I am not a man who will be happy to hurt anyones feeling simply.
I know you are always “after ” me, but can you or will you ever believe that that joke is originally send to me by my niece.
Hello, Balasi, Drrafick, and the rest.
Ref. Pelangisenji joke – qoute :
“It’s a fact that when a baby is born, doctors slap it to make it start breathing, but in rare cases like you, when born, doctor slaps himself !.”
…. sent to by his niece to HIM (Pelangisenja).
Aiyah, you guys obviously misinterpreted, or jumped to the wrong conclusion, lah.
Read again…”.but in rare cases like you, ….” ( the joke was meant for the recipient, right?)
Thanks for sharing your joke, Pelangisenji (Your niece is a real joker, teasing her uncle like so..)
Okay, everybody ..Smile and be happy !
Let’s all enjoy the weekend, yeah !
Ghostbuster,
Thank You. If that joke really have some unintended ‘nasty’ element I sincerely apologise to all readers.
Dear pelangisenja,
Could live with your explanation…., but Dr rafick…, has not replied…., by the way Ghost buster…, has concurred with you that it’s a joke….., so let’s leave it at that.
Pelangisenja….., I was never after you …., it just a forum …..do you get me….., no hard feeling’s.
Would luv to have your neice…..in our forum….., send her my ” Salam Sejatera “
Dear Kok,
This has been the norm…of the government of the day to use as they wish…., ( tax payer’s money )…..and then push it through Parliament in the form of ” Supplementary supply Bill “….. it as been a practice on numerous project’s, and it also act’s as a saviour for BN Parties.
So nothing new, that the rest of us don’t know. Regards.
Dear AK and others
(1) When we address the issue of National income and expenses, it has to be addressed in 2 broad sense i.e. Income and expenses. Lets look at them.
Income
(i) National income must come from multiple stable source. Personal income tax is one of the stable source. Personal income tax need not be the same as corporate tax. Some people are concern about the people turning private income into corporate income if the disparity of income between the two is wide. This is a really non issue as it is being practice widely all over the world. For e.g.
(A) Australia:
Corporate tax flat is 30%
Personal income, progressive scales with max tax 47%
(B)Germany
Corporate tax flat is 25%
Personal income, progressive scales with max tax 45% . There is also a solidarity tax (unification east and west germany 5.5%)
Expenses
I believe many have said and conclude that our present government is not efficient at managing our monies. There is too many “burst pipes” and abuses
Doc,
You are comparing a developing Malaysia to the advance nations. Closer to home , countries are all lowering tax for the higher income bracket and gap against corporate tax are narrowing . My guess is that all are fighting to attract investments both home-grown and FDIs and this is a form of incentive.
When we have reached developed status, where the middle-income band is large enough there is a logic to such increment for the super rich. By then, income tax collection from the affordable population is the revenue generator.
I feel the policy is not to tax the rich to pay for the poor. There will always be the poor relative to the rich and Government has to take care of the hardcore poor. But the challenge is to increase a bigger stratum of taxable income earners rather than to increase a bigger population of free loaders. Wages are still low and have not gone up over the years. I would wish to raise monthly salary of my fresh graduates from RM3,000 to RM3,500 but again the Government must ensure the policy is towards an environment for increase economic activites and sustainable business to attract investments.
Dear Dr Raffick,
Honestly I feel you shouldn’t have been so patient with Rafa’s Revolution, he should have tried to figure it out first and do some homework himself instead of pointing finger at you of not using the right terms. I am obviously not very pleased with his tone.
Dr.Raffick, regarding item 6 I think quality of primary care and the health of the rakyat can substantially be improved if traditional chinese medicine and homoeopathy are given equal emphasis and development. The costs of these care is so much lower and its efficacy had been proven time and time again (though you may disagree). India is a prime example of how quality care can be given if these different healing modalities are allowed to prosper. Let people decide. If modern medicine is all it is made out to be then people will flock to it but it would seemed that even in developed countries the reverse is true. Even allopathic doctors are prescribing homoeopathic remedies – not as placebo but as actual treatment modality.
Here are some interesting read of the harm modern medicine had caused society :
http://www.garynull.com/pix/DeathbyMedicine_march09bf2Faloon.pdf
And the dangers of vacine :
http://video.google.com/videoplay?docid=6531447125053615129#
And swine flu vaccine hoax and scam :
http://www.homeopathyworldcommunity.com/forum/topics/flu-vaccines-revealed-as-the
When the government talked of removing subsidies from our petrol what they are talking about is not real subsidies but paper subsidies as we are a net exporter of oil. So when these subsidies were removed what we have in truth is the rakyat subsidising the government’s incompetency.
The argument that petrol prices not following market prices will lead to market distortion is false as it is the government who determined the price – not the market.
Dear Morning Dew,
You are right……, but you didn’t leave any suggestions to correct…., this government’s incompetency….., merely arguing that it’s the government that determines the price but not market forces.
Dear Author,
I dont understand what you are trying to relate in Point 11. Can you be precise and use a simpler term or perhaps the actual jargon? What do you mean by annual chargeable income? Wtf?
Are you trying to say annual taxable income? But that does not make any sense either. If it was annual taxable income, how can you have such a HUGE range of 2500 to 42k and yet referencing to 3.5k a mth?
Seriously, your article is interesting but pls use the right term and not to confuse your readers.
Rgds
Dear Rafa’s Revolution
I refer to point No 11
My assessment shows that a family 4 living in major city would be struggling with annual chargeable income from RM2501 to RM 42,000 a year (or below RM3, 500.00 a month). This group tax rate varies from 1% to 12% or from RM25 onwards. Is our government so hard up that they need to collect RM25 from the lowest rung of the society? I think the cost of doing the collection and maintenance of the accounts is higher than the collection. In my opinion, those with chargeable income of below RM3500 a month should not be paying any income tax. There is just too much hassle in the collection and maintenance of this collection.
(1) Annual taxable income= Annual chargeable income. This is the amount that LHDN can charge the income tax
(2) RM42000 a year = RM3500 per month (i.e. 42000/12)
(3) Please look at the tax structure 2009. You will understand what I mean
(4) Currently those having Annual taxable income equal and below RM2500 do not pay tax. I am asking Najib to raise it to RM42000 per year
Surprisingly dude, you are the first to be confused among the 50 commentators and 2390 readers.
Rafa’s Revolution,
Dude, don’t try to be a smart ass….., by the way Doc has clarified…., others will do so….., believe me.
Instead of helping, the annual fee for credit card will only add to the problem of the financially stressed. Whatever amount imposed, this group of people have no choice but to cough up.
For those who pay up punctually, the solution is to focus on the card with the best rewards or switch to Master / Visa debit cards.
Dear charis 14,
Better not to have any credit cards….., we tend to abuse them, …..on the RM 50.00…., the guys who offer us these cards should pay…., they are already fleecing the public.
Hello, Balasi.
Good morning hours…to beat the traffic jam…yeah?
Para 4 and 5 made by Drrafick affected millions of people.Exemption for the First card is fully supported.
What was sickening…when approached by journalists on complaints from the general public, 1Malaysia “PINK LIPS” retorted “are they so poor that they cannot afford RM50 ? ” !!
Tell me..What F*@#king answer is that? Impose service tax just like that ? Without proper explanation, or justifications.
If its based on affordability, then why not PINK LIPS impose service tax (say RM500,000) on the Millionaires for attaining the status.
Or maybe take it a step further…include individuals with Titles like Datuks, Tan Sris, etc. They can afford it, mah!!
( and lets see the outcries from them!). But PINK LIPS Dare not touch the rich and powerful, eh?
The point is…. tax based on affordability ? Not based on principles or rakyat well being ?
Digress a bit….
Times must be bad. Recently, received mail from card issuer with a RM10,000.00 crossed Cheque enclosed, valid for 2 mths, to be used as wished.
Advanced Cash fee at 2%, instead of normal 5%. ( Loan – modified Ah Long style from a reputable Bank?).
What a tempted offer !! Who would give RM10K without any collateral ?
Anyway, just threw it on the shelf..As a souveniour.
Charis 14
(1) While having 1 or 2 credit card for the purpose of having ease of transaction is acceptable but many people have cards and use it to balloon their debt
Dr Raffick,
To me, it is not “the having of” many credit/charge cards, but the “uncontrolled way” of people being given the credit cards.
Many-many years ago, when you apply for a credit card, you have to furnish at least 3-month salary slips, 6-months bank statement, J-Form income tax and other evidence to prove your income (company related forms for those who dont have monthly salary). All those document with the application form which stated clearly the minimum level of annual income that make you eligible to apply for one. With all those documents, it still doesn’t guarantee you an approved credit card. If approved, they give you a credit limit which after sometime of monitoring, they either increase your credit limit or witdraw/cancel your credit cards.
But nowadays, I go to shopping centres, gas stations etc, they just request your photostat IC and sign the application form. Even the details the promoter will fill up for you. No other supporting dicument necessary. Next week you will 1, 2, 3 credit cards in your mailbox!
To me, the imposition of RM50 and RM25 is not fair to genuine and eligible credit card users, especially those who treat their credit card as if it was a charge card (disciplined user).
Remember your article about the “Insight of Decision Making”? The boy who plays at decommissioned railt rack versus the boys who play at live track?
On advantage of credit/charge cards:-
1. You dont have to carry cash
2. If you used it as “charge” card, the cash-flow is in your favor when you spend first, pay about i month later. Think about the money you put in the bank for one-month before paying the credit card bill.
3. Without credit nowadays, can you get cheaper airlines ticket over the counter?
4. Last year, I redeem many goods including Nokia Music Express phone, using all the points I collected when spending via credit cards. It was almost RM2,000 I(free!) in value redeeming all those points I’ve collected throught the years.
5. I have another credit card which I dont use. But the credit card is necessary because it is a membership card to a certain outlet. Whenener I buy something in that outlet, as a member I’ve got points (even though paying with other credit card). So far, I have redeemend cash voucher upto RM3000 in value because of all the points I’ve collected so far.
The are many more advantage of credit/charge card if you use it correctly. Dont give knife to the kid, but a butcher make a living from a knife.
So, the government, to me is attacjing the wrong person here with the RM50/RM25 tax because I feel that I have been charged for nothing! By the end of the year, I am going to terminate all other cards (losing my membership etc) except the one I and my wife use. And I have still to pay RM75 for nothing!
Please control the issuance of credit card (like many years before) not “punishing” genuine credit/charge card users like us! The govt is barking on the wrong tree eh? Are is this just a cunning excuse to squeeze people’s money out of nothing?
Sorry Dr.,
Got mixed up. The insight into decision making where the boys were playing at the rail track was actually by RAPERA here :-
http://jahaberdeen.blogspot.com/2009/11/are-we-being-sacrificied-by-our-apathy.html
Sorry, I somehow got mixed up.
Good morning Ghostbuster,
1Malaysia “PINK LIPS”…..should pay on behalf of the credit card holders……., did he suggest what he was going to do with the RM 500million that will be collected yearly….might be end up in someones pocket.
I thought the more you earn the more you pay…, but here they want to reduce the tax that the rich have to pay……mana logic.
They is actually a marketing war among the card issuers…., that they don’t mind making more malaysian’s Bankrupt.
Correction..
“There is” and nod “They”
Another correction “not” ( to sleepy, I guess so. )
the problem is that a select few have right to make free money and we end up paying for them all in the disguise of NEP. and lets not say it is a malay crony that benefits, the non Malays too. Easy money, rent seeking etc has to stop as we the rakyat need to pay for it with hard work. AP la, commission agent la, free logging contract la, bail out la, profits they take losses we bear…time for all this shit to stop. you want to make money, well go ahead but work for it. People come out with inventions, we come out with AP!!!Rakyat is screwed not didahulukan!
Rocky,
You are right…., cannot say more, just that the term should be Rakyat di ” BODOH BODOHKAN ”
These guys…., have come to a cliff…. of no return…., either they jump into the ocean …or they Repent.
Doc,
I pay personal income tax of RM 200K and corporate tax of RM2M for YA08. On top of that I feed 250 Staff . That is a big CSR on my part and you are asking the Government to increase tax from me. Susah lah!
It is the leaks in the pipe that the Government should address. Leakages and wastages. Straight 8 years of deficit budget is bad, notwithstanding the country has sufficient reserves.
Look at revenue collection. How many in the country, rich and and not so rich, are tax evaders and those who do not pay teir taxes. Improvement in the system of collecting tax must be put in placed. Tax at source just like in Indonesia may be a good idea, where employee are paid nett and the tax remitted by the employer. GST on selected goods and services is another way of revenue generation that will enforce collection at source. Some form of check and balance is necessary. There are many taxable income earners out there mostly in business who are not paying tax. How to catch them is what the government should do.
Yes, no matter how much the government collect, if the government do manage the expenditure wisely it will led to wastages. There must be cost- benefit exercises done on every expenditure and hence value for money. Unnecessary expenditure must be curtailed and not spending for the sake of finishing allocations that are normally the case towards end of the year.
It boils down to implementation. Done in a way with transparency, accountability and integrity as the yardstick. Otherwise, we will see the same Auditor’s report next year.
Dear AK,
Thank you for been very frank….., but I personnelly feel that this should not be disclose in this forum.
Dear Admin. ( Dr. Rafick ) please remove AK’s comment Paragraph One from this forum….
AK, will add to your other comments…later.
Balasi,
Nothing to hide. The figures are not real but to prove the point that income earners in the high bracket have done a fair share of corporate social responsibility. Why tax them more when it should be in line with down trend in corporate tax elsewhere in the region.
AK,
I agree with you,….but why impose more on middle income earners like me.
Dear AK,
Agree with you that for every one malaysian who pays tax another five evade paying.
Since I was in procurement during by days in the civil services…., Christmas shopping should STOP.., just to finish the provided allocation for the year.
Finally…it boils down to MORAL….and Transprancey…., if not it goes down the drain…., Let’s just sleep on the reason why Defence Equipments cannot be purchase through ” Open Tender’s ” ….., if you buy their reason’s then you must be a CUCKOO.!…or a CHIPLAK….. or a crony.
Let the others define.
Dear AK
There is 2 way to look at the points raised
(1) Tax system is design in every country in the world on the basis that the rich can afford to give a bit more and it still does not affect them. It does make them marginally “poorer” but when compared to those people in the lower rung of the society, the rich is still very rich. In Europe, Australia the tax bracket goes as high as 40%
(2) For the additional social responsibility that you and other will do by paying more, you will get brownies point in heaven.
(3) I agree we need to address
(A) Leakages (Like what Anwar said it is not ketirisan but kebocoran!)
(B) I know many of my friends in private hospital pays very little tax where they channel their income into companies and the companies has fake number of employees, maintain non existent asset and many other tricks in the book
Doc,
I subscribe to the Government imposing equitable tax rates . I rather see an increase in disposable income for the lower strata wage earners than taxing more on the rich. By increasing wages.
There is a close relation between corporate tax and income tax rate for higher bracket . You increase the personal tax rate , you have also to increase the corporate tax. At the moment the Government is encouraging investments and tax incentive in the form of lower corporate tax rate is the order. As you have exemplified you can manipulate the system if there is a gap between the 2 tax rates.
There are too many tax evaders from people doing unregisterd businesses. As an example , plumbers doing small maintenance works you see around easily take home monthly in excess of RM5K. These are not counting the Towkays , Alongs ,etc. The Government must find ways to make them pay taxes, not necessarily from income tax.
Improvement in tax collection system can easily increase revenue rather than increasing tax rates. As said, tax at source , scheduler tax deduction are ways forward. Another is the system of checks in the payment of tax. Where the payer who is made responsible to remit the tax and the payee gets a % rebate on presentation of receipt of payment by the payer. The GST should be implemented this way.
We cannot go back to the Robin Hood era , where you rob the rich to feed the poor. Taxing the rich to pay for the poor will never narrow down the gap between them. This is a subsidy mentality that will create our own beggars in this country. I rather see everyone , poor and rich, paying taxes according to their ability and contribute to the country wealth.
AK,
leaks are of course an easy way to transfer accountability and shift responsibilities. The argument you presented is nothing new in that corporate responsibilities towards society is already fulfilled by its mere presence in providing jobs. Let’s get real ! A business entity is set up due to greed and its sole reason for being is to optimise profit. It can give all manner of noble reasons but that is the bottomline.
Corporations with all their professionals and consultants are able to find “tax leakages” and “hide profit” and use “liabilities as expenses” and numerous other tricks of the tricks to avoid doing its “social responsibilities.”
This is not to say that leaks and vapourisation of state funds do not exists but it would be like a pot calling the kettle black.
The 1% reduction in the maximum personal income tax was to remove the discrepancy between personal and corporate tax. A high income earner could easily incorporate himself and hence pay less income tax. Instead of doing that the government could have just as easily increase the corporate tax by 1%. To argue that this will set our competitiveness in attracting FDI is really a non-starter as the FDIs are not coming in due to other structural and governmental reasons.
I would to add on the government tax on imported cars which elevate the car price up 50%-300% which ridiculous to low and middle income groups. This has been done in the name of protecting the national car maker (PR_TON). No to forget AP as well. Again in the name of special right which conflict with the first one.
For the cars that rakyat purchased we have to pay installment in 5-7 years with almost or half of monthly income. Have someone thought of “Why monthly installment?” . Because the car price is ridiculously high. Car is an possession which eating up most of our earning. Yet it is still not enough, government imposed more on income tax. That is why Malaysian is always poor.
1Malaysia? There are more failure stories to tell than success stories…
Lee CC,
I agree with you and I don’t…., if you want to posses a car well good and done…., you should know your own means.
Blaming the Government…., will lead you no where ?
Some blame the Gov. others don’t…., when TMM embarked into the national car project….., many of my friends……vowed they will never buy it….., but now not only their spouse…but their kids use it to get around.
Car is no longer a luxury…, it’s a necessity. Blame the Government on this…lax of planning on basic transportation…… that is reliable…., that’s one of the reason a family of seven has seven cars….. ” PROTON “
car will not necessity if gov keep their promise on improving public transportation…last time pak lah promised about rm10Billion saving on fuel subsidies…i see no changes in public transport quality…
Regarding the petrol subsidies – do you know that there is a formula agreed by government with all the oil companies wherein there is a fixed margin for petrol and diesel sold in the stations. Thus,the oil cos are making tons of money – whether the crude prices go or down, they are assured of a huge profit!
Dear Doc,
I think the reason why our gov lower the rate of taxable earning of RM250, 000 is just because they have announced the corporate tax of 25% for 2009 during Pak Lah’s budget.
The gov cannot have the maximum individual income taxe rate of example 28% while the lowering the Corporate Tax to 25%. With such a big gap, the rich will have room to manipulate their tax thru their company.
In Singapore the max individual tax for S$320,000+ is at 20% because their corporate tax is only around 18%.
(1) What is the problem with having different corporate tax rate and personal income tax rate? It is done in Europe and Australia.
Doc,
That’s also why we have this place call British Virgin Island.
If the corporate tax rate is lower than the personal tax rate then many rich people would incorporate themselves and you don’t even have to go to virgin island for that.
MD,
Mind to elaborate on your point ? Dr. Rafick doesn’t seems to understand what I am trying to say here.
Morning Dew,
Would you agree with me that….., without all this…, they have already homed into Virgn Island and other tax heaven Island’s.
Dear Good Doctor,
I think you and the Najib regime are looking at managing the Malaysian economy at 2 totally different angles. From your perspective, the Rakyat is paramount. From the Najib regime, it is how to benefit the UMNOputras/cronies. If you reduce the wealth of the UMNOputras/cronies, how do you get the money to finance elections and buy over froggies, opportunists and those frequenters of casinos (overseas, as it is haram in Malaysia). If you take from the poor and once in a while during elections and bye-elections, you give them back some of the money taken from them, the rakyat is forever grateful to you and will cry tears of joy. So, as the Najib regime pronounce the 1Malaysia concept we should be grateful for the small mercies and hope for the bye-elections to come your way. In the meantime, bear with it. It is a world economic crisis, mah
If the Govt manages were ever to eliminate corruption and wastage of public funds (said to cost some $28 billion), they should be able to increase the tax bands and cut tax rates to benefit lower and middle income groups.
But when directly negotiated contracts are the norm over open tender systems, the Govt will inevitably end up paying double or treble the normally accepted prices. Examples abound as disclosed in the Auditor General’s Report and in financial scandals such as PKFZ, Perawaja, Bank Bumi, MAS, UEM/Renong, purchase of jets and submarines!!
The announcement yesterday by PM Najib that China will be awarded a major contarct for double tracking railway costing several $billions does not augur well for financial transparency. This will only perpetuate the old system where fraudtrepreneurs had a field day, and still are, at the Rakyat’s expense. Why can’t there be an open tender?
One way to protect lower and middle groups is to index link the tax bands with the Consumer Price Index (CPI) so that they are automatically cushioned every year from inflationary increase in cost of living.
Furthermore, money from Petronas should be used to create a Sovereign Fund at both national and state levels (Kelantan, Trengganu, Sarawak) etc., and be invested prudently, as does Norway, so the Rakyat can monitor and benefit it. Here, Petronas has become the whipping boy for all our Govt’s grandiose white elephant and fancy projects.
Currently, Khazanah’s programme of investing in several theme parks costing $billions, stinks.! What on earth are these people venturing into business with the Rakya’ts money for? Have they done really serious financial projections and research studies on this matter and the competition that is emerging from China, Japan, HK, S’pore and Indonesia?
And if they fail and go bankrupt, guess who will have to come to the rescue and bail them out?
Yes, you guessed it right as to who the suckers will be in the end!!
dpp
We are all of 1 race, the Human Race
I disagree with point number 4. Do you think those who are in debt will stop using their credit card just because of RM50 tax by government? These people are already paying more than RM50 interest every MONTH. So what’s another RM50 per year.
Malaysian,
I agree to your point. Those already in debt will continue to do so. Even with RM200 tax, they’ll continue using or holding to the card(s). To some people, it not of a choice to but stay afloat.
That’s why we are seeing less and less people borrowing from friends or family members or on the “555″ book. All the borrowing are on the credit cards. Those who are less fortunate not being able to get the cards will go to “Ah Long”
Practically, it seems our modern Malaysia is on debt. The day one started working, the debt begins as study loan, vehicle loan, engagement and wedding receptions, housing, furniture and fittings, and so on.
Prices keep increasing but wages maintains and that is one of the cause of increase in debts.
Malaysian,
I assume you have plenty of fiftys to spare. The logic behind this is why must we be made to pay…., when you yourself admitted that those using these facilities are already paying more then RM50.00 in interest a month.
Let these guys….who haunt you to get a credit card…pay.
I do not know much about economy, they said Najib doesn’t know either………..
Leong,
Me to, …but Najib…depends on his brother…., who earns millions in salary and perks a month……, so he might know better.
Hmmm.. Budget 2010 – benefits which particular income group ??
Some measures announced are a real RipOff – esp. service tax on holders of credit card. What service ?? …for being in mere possession of a card ??
It would make sense (though debatable)if a service tax is levied on expenditures using credit cards…in such instances, a service is provided.
Some wizards (or lizards?) in economics at work to collect easy revenue from millions of card holders?
And to widen further the revenue base, some smart idiots are now suggesting penalising the public who possessed more than a copy of pirated VCD even for home private use.
http://thestar.com.my/news/story.asp?file=/2009/11/12/nation/5093325&sec=nation
What next ?? F*@# 1Malaysia !!
GhostBuster,
You know I know….., these formulators….., never knew hunger……or did they walk around with a few ringgit in their pockets……, they are all CASH COWS…., due to our GOV. POLICY…now hilang daratan.
They will drop down one day just like the squirrel.
In simple word, Najib budget does not help the poor, but make the rich become richer……sad to have such kind of jokers to lead our govenment.
VP,
Not just like that,,,,, there is a bigger picture to it…, please read ( AK’s COMMENT ) ….. then you might digest it a bit….or you will vomit.
Tax at Source for Stock Market Investment and Fixed Deposit !!!
There R more than one category of people who invest in Stock Market and Fixed Deposit.
These are the careful middle income People who planned their retirement and retirees with no other source of income so how come you want to tax these people.
These people are already paying a high price for retirement -
1. the proposed and then shelfed plan to ban 15 year old cars on the road – most of these cars are owned by retirees who bought them new and maintained them. These cars are seldom involved in MAJOR Accidents – Major accidents are caused by NEW POWERFUL CARS DRIVEN by the RICH and their Not So Experienced Off Springs. The main reason for this
policy is to force the Rakyaat to buy new cars – especially Proton.But Proton is not that affordable also, so U c the RICH
is favoured again.
2.Property GAIN TAX – the a tax is now slanted in favour of
the RICH who speculate in property, as there is no time exemption like before. Not many middle income like to sell their house – they do so mostly to supplement their twilight
years.
3.RM 50.00 TAX on Credit Cards is a further burden on the middle class – as these are the people who are most dependant on the use of cards. We had “Buku 555″ which we
used at the neighbourhood provision in days of old. Now we use Credit Cards at Super/HyperMarkets.We need more than one Card as different Markets give special discounts to different cards at different location and time.
4.Why give the 1% rebate to high earners who don’t need it ?
Raise the tax exemption to a higher level to assist the poor not the RICH.
5. To help the poor/retirees subsidise daily essentials/tolls etc .
6.This Budget really appears to favour the rich and Burden the Poor.
Dear Yong,
To your openning comments the answer is simple… the Government got no one else to TAX.
On comment (1)
The Government is just telling us that we should nou out live our life….if our average life span is seventy….then we should go before that if we don’t have the means…., then we become a problem not only to society but the BN GOV.
On Comment (2)
How else can the rich become richer…., our forest are already…..on a verge of depletion.
On Comment (3)
The jokers who convince us to use their cards should pay.
On Comment (4)
Not a higher earner…cannot explain…. wait for AK to explain.
Comment (5) & (6)
These formulator’s…of our Budget…., either don’t belong to Malaysia Bolih……and were hired to prepare a budget.
I mean ….foreigners….. paid to add spice..to our rotten state of affairs.
Comments from others will follow.
For credit card, goverment should imposed tax RM50 for the third card. The first two visa and mastercard should be waived. I used credit card for safety reason not to bring lots of cash in my wallet and also emergency like you admit to Hospital that required deposit by CC. And CC is for convinience purpose.
I am a good CC holder, i settle my bill every month, Why I been punished?
On your second suggestion on TAS. I disagree on this. Why u want to charge TAS for FD. now the FD is 2% so little and most of people put the money there is to save and reserve money.So you asking people to keep the money at home?
And for TAS on stock market, it should follow India, where you will be no tax for profit if you hold the stock for 1 year. Market is for investment purpose and not for gambling purpose.
Summary, the budget is for middle income and rich people.
Exp u get rebate for broadband via tax, low income people farmer .. students .. retiree mostly not in the tax catergory, hence this rebate does not apply to them.
On point 12
“Instead we see that the government reduces the income tax of those groups with taxable earning of RM250, 000 and above”
We do not need to be rocket-scientist to know why Najib is doing so. Who do you think benefits most from this? Of course those who nominated / voted for him in the UMNO general assembly, and those in BN who blindly support him, who also continue receiving lucrative multi-million ringgit contracts
Aiya Doc, where got peoples first one ? More like cronies first la.
Yupe….this budget is definitely about “people first”…….people’s money first………
And this Budget also proves one thing……that Najib is no economist………
Dear Dr,
You are correct on the main reason malaysian are feeling poorer is due to the depreciation of our currency.
In the past 12 years, it has depreciated even more than the USD. before asian financial crisis, it was USD1=RM2.4/2.5. Today it is USD1=RM3.6, while income has not risen by similar amounts compared to the rise of USD.
On your idea of oil stabilisation fund, this was availbale when prices of oil was stable and cheap. In fact, in the nineties, we were paying taxes on our petroluem usage without knowing it.
Any intervention by the government into any market will create price distortion. And any distortion in prices will cost the govenrment dearly due to smuggling and misuse of this this facility. Presently, this include sugar, rice, flour and previously, by a huge margin, diesel.
Diesel is still being smuggled by our fishermen, who are sold at 50 sen per litre through Nekmat(fishermen’s association) and currently their head, a certain Nik guy who peper sprayed Dr M in Kelantan many years ago, drives around in luxury cars that MACC failed to notice. I believe, he acts as a broker for Thai fishermen to fish within our teeritorial waters, supplies them subsidised diesel, but charges them slightly less than market rates, making more than RM1/litre in profits, at the expense of tax payers money.
On sugar and rice, many suppliers declare their imported stock for re-export, meaning this batch will not be taxed, but were actually not exported. They too made their money due to distortion created by the govenrment in terms of high import duties. As for sugar, the shortage is due to higher prices in neighbouring countries as ours is subsidised.
On the overall taxation, I fail t understand why companies that made money, are penalised by taxation and their sharholders are taxed for dividends, whilst those that are badly run and losing money, are awarded with zero tax.
It should be a level playing field. Corporate taxation should be abolished altogether for companies that employ Malaysians and inject capital into their operations, like purchase of machinery etc.
Pump priming the construction sector seldom benefit the rakyat, as most of the workers are foreigners. It is of course very good for the construction company’s bosses.
One of the reason why salary of those on the lower level of the society did not rise is due to easy influx of foreign labour, who are given free food and lodgings and low salary. Those who did not bother to upgrade their skill, will eventually suffer.
…going on a detour….
I have yet to get an acknowledgement regarding the 2 books I have paid, have yet to receive them, together with a nod to ascertain the validity of membership, I have banked in the fund on 27th oct.2009
…including home address with emails to you guys……….
What has happened???
how can we be of help ?
Dreamlady..,
Anyone here cheated you….., I sincerely believe you have been deceive ….., since I quote detour to Rocky…, am I the one.
Regards,…please reply.
Dreamlady
What is going on? Someone cheated you?
Kindly email me with details
drrafick@gmail.com
Hi,Dr.
Got what DreamLady meant, at last !
Details here (towards end of article):
http://mt.m2day.org/2008/content/view/28145/84/
Some miscomms involved ?
Hope that clear up the puzzling post by DreamLady.
Dear dreamlady,
Don’t worry…., there are allway’s hiccups…down the lane but RPK…., will allways walk the line. Regards.
Dear Dr Rafick
I prepared the following analysis:
The following proposals in Budget 2010 will have an impact on public health and medical services:
1. Government to allocate RM 14.8 billion to manage, build and upgrade hospitals and clinics
2. Government to implement Goods and Services Tax (GST)
3. Government to grant income tax exemptions of 100 per cent on the value of increased exports (services offered to foreign health tourists) from the current 50 per cent
PROPOSAL 1: RM 14.8 billion to manage, build and upgrade hospitals and clinics
Since a public hospital is very costly in terms of construction, routine operation and staffing, it is absolutely necessary to determine if there is a need for it in the first place. Can the medical services to be provided by the public hospital be provided more efficiently by other means? For example, through an increase in the number of clinics (primary care) or through a better functioning referral system to the existing network of public hospitals (secondary and tertiary care). Many developed countries are reducing the number of public hospital beds in order to control rising costs, it is unwise for Malaysia to build more hospitals (and thus increase the number of hospital beds) unless there is a strong need to do so.
The primary task of health care facilities such as clinics and hospitals is to provide “medical services”. So the focus and spending priority of the Government should be on this and not on their upgrading simply to provide better “hotel services”.
PROPOSAL 2: Introduction of a Goods and Services Tax (GST)
Economic incentives and economic disincentives are powerful influences on human behavior. “Subsidies” can be used to encourage certain kinds of behavior while “taxes” can be used to discourage other kinds of behavior.
Health and medical goods and services proven to improve the health (or quality of life) of people should be exempted from GST. Examples would include essential pharmaceutical drugs and medical devices such as wheelchairs. Other things that affect health such as basic foods (especially those consumed by the poor) should also be exempted from GST.
PROPOSAL 3: Encouragement of medical tourism through income tax exemption of 100% on services offered to foreign health tourists
When evaluating medical tourism, the focus should NOT be on the citizenship of patients. Promotion of medical tourism is simply the equivalent of encouraging more consumption of medical services by more affluent patients (i.e. patients who are able to pay for higher end or more expensive medical services).
Although encouragement of medical tourism may contribute positively to the Gross National Product, there will also be negative impact. These include:
Increased demand resulting in higher prices for Malaysian patients in the short run
Increased demand for higher end services, thus further distorting the distribution of health personnel supplying the different kinds of medical care (“primary care” versus “secondary/tertiary care”) and the different medical specialties
Increased outflow of personnel (especially specialist doctors) from the public hospitals to the more lucrative private hospitals that cater to medical tourists
Dear Phua Kai Lit,
On your proposal one….., even before it was announce in the Budget…most Gov. Hospitals have already embarked onto it. Anyway….you should know that these projects, are all politically connected….so no point to harp.
On proposal two.., GST…..it should be implemented for the well beign of the less fortunate…..and also to the elderly.
Proposal three can be carried out but not at the expense of suppressing the need of our own citizens. Our needs should be address first.
Dear Balasi
Regarding your comment:
“Proposal three can be carried out but not at the expense of suppressing the need of our own citizens. Our needs should be address first.”
How to do so?
Dear Puah,
It can be done if the Governments Hospitals…., cater strictly….for the citizens…..and Private Hospitals cater for those who can afford…and also medical tourism.
Let’s not talk about how to do so…., if we can plug all the corrupt practices….., the wastages and leakages.., the government will have enough funds to provide a comprehensive health package free for it’s citizen all year around.
Is it not sickening to read pleas from citizens from this country…for funds from the public in MSM….., and yet our 1Malaysia Government…., want’s to promote Medical Tourism….!
Secondly…..undo all privatization in all Government
Hospitals….., and revert it back to the Health Ministry.
Engage competent guys to run it……, ( just like how hospitals use to function in the 60 & 70’s …..with minimun resources.) Privatization …..has taken us backwards.
Dr. Rafick,
We will never get a Budget…. that focus on the rakyat…if the government seeks the advice and directions from guy’s who mint millions in salaries & perks.
These guy’s spend the equivalent of a lay man’s monthly salary a month on a day….., so how can you expect them to feel or understand the short comings of a average wage earner.
Just have to pray for Change.
But in Malaysia, MACC, police, Umno and judiciary are one team – united against law, order, rule and justice – to intimidate the people, to jail the innocent, to oppress the opposition and to defend the criminal.
Dear aston,
Don’t you think….., you have swayed from the topic.
This is about the BUDGET….., and how it affects the Rakyat. Your comment should be address in another forum. Very sorry but uncall for comments.
According to the Malaysian Employers Federation (MEF) quoted in the story, there are 785000 Malaysians who work overseas, and an estimated two out of every three among them are likely to be professionals.
Now we can quantify brain drain.
1000 experienced engineers equates to RM10 billion investment. 2 out of 3 of 785000 professionals working overseas is ~ RM5400 billion.
What was Najib budget for 2010? RM200 billion?
So, it is equal to 25 times of national budget.
Dear fargowin.
Not disputing the figures given by Malaysian Employers Federation (MEF)….but can you be more precise where you got the the figures to quantify the value of brain drain…?
You must understand that not all that follow this Blog…, can comprehend simple equations…., so I feel you should justify this in detail.
Awaiting your prompt reply….., don’t leave us hanging.
UMNO is only good at spinning and deceiving the people, in particular the malays. The younger generation of malays now are smarter than their forefathers. The smart malays are shying away from UMNO because UMNO has deceived them for far the last 30 years. UMNO has brought harm onto themselves.
Dear Ruyom,
Has this got anything to do with the BUDGET….., please enlighten me…., and the rest.
“The RM10, 000 is equivalent to 400 people paying RM25 per year.”
Instead of a fat cat individual sacrificing his annual holiday, a group of 400 people will have to foregone their breakfast or lunch a few times a week.
Haha……Malaysia…land of the compassionate C4 bomber.
Dear StevenO,
Not to worry….., the Malaysian Government…., knows that the staple diet for most of the RM25.00 contributors, are kankung and ikan sepat…., we can harvest and catch them in the parits….in the kampong or in the town…, along and in the abandon mining pools.
You forgot ……” Malaysia Bolih?
so much goodies, yeah right, there’s never a budget that makes me happy
when the rakyat have to pay more, then its not a good budget.This is a good budget for those high income earners and invester in iskandar but for the majority of malaysian….what do we get?
they said this budget got everything for everybody…i doubt it and i know it just some hypes to keep people happy…
Yes, there’s surely everything for every one.
I have the privilege to pay RM100 per year for the two credit cards I own. I also have the privilege to pay extra insurance for my motorcycle though I’ve never made any claims in the last 20 years on the series of motorcycle that that I own.
For the rest, I haven’t figure out. I’m sure there’s more to it. Cool, isn’t it ? Who says we can’t be charitable to the BN/UMNO government. Wow, am I really patriotic as I’m telling the government all my sources of income unlike some who can’t even declare but are able to live beyond their means and have certification from MACC.
Maybe the banks should pay the government RM200 for every card they push to the customer and customer pays RM50 for ever card (less the first two) they hold…