5 Awesome Things About The Malaysia Budget 2014

Last Friday, the Malaysia Budget for 2014 was unveiled by the government and the focus of the budget is to address shrinking account surplus and large fiscal deficit of the country. We all can find the details of the budget in major local newspapers and on the Malaysia Ministry of Finance - Treasury website.

Normally, the budget announcement is a routine activity by the government. However, this year budget tends to get more attention; just because there are 5 awesome things about the 2014 budget:

#1: Goods & Sales Tax (GST) - effective 1 Apr 2015
I am not trying to say that paying taxes as a consumer is awesome but the introduction of GST can now educate the public about supply chain management. We can now understand how a product is being made available to the end-users through its distribution channels. Not only that, there is a RM100 million training grant allocated for businesses that send their staffs for training on the GST, that's awersome!

#2: Real Property Gain Tax (RPGT) - effective 1 Jan 2014
Changes often result in either favourable or unfavourable. Many may see the changes as creating more opportunities, some may see it as threats. For young middle & lower-class working people, the RPGT might be something favourable as this will reduce speculation of properties for short-term profits. The 30% RPGT imposed to any property disposal within 3 years of purchase looks fine for long-term investor and residential purchaser. However, the a seller may transfer the 30% RPGT to the buyer by inflating the property selling price or they may hold the properties for longer period of time. Now, higher selling price will result in more RPGT and higher stamp duty; longer holding of properties will result in more interest payable to banks and owner may charge higher rental to cover the interest; properties developer will still run their business as usual. So, who will benefits? It depend...Awesome right?

#3: Foreign Property Buyers
In the past, foreigners can only purchase a property in Malaysia that cost RM500,000 and above. Hence, we can see so many residencies and condominiums are priced accordingly to target certain social class of customers, including foreign buyers. The new budget has raised the minimum price of RM500,000 to RM1 million, double the earlier minimum price of properties. This is a drastic move that will create a strong impact especially on the foreign investment but it must have been rationalised by the government earlier to make such decision. Come to think about it, what are the average price of properties that these foreign buyers have been purchasing for the past years that justify the 100% increase of minimum price...!?

#4: Cash Handouts
With all the various cash handouts and schemes for qualified households and selected individual groups which was estimated to involve 7.9 million recipients, the government in total will allocate RM4.6 billion as cash handouts. Awesome, if you are one of the 7.9 million who will get a 'few hundreds' of ringgit! (please note that this cash handouts is a ONE TIME thing and NOT on a monthly basis...wake up please!)

#5: Sugar Subsidy - effective 26 Oct 2013
The most talk about thing about the 2014 budget, sugar subsidy. The government has announced that the sugar subsidy of RM0.34 per kilogram will be abolished with immediate effect on 26 October 2013. It shows how urgent is this matter that it has to take immediate effect, especially when 2.6 million Malaysian aged 30 and above were suffering from diabetes. The government is expecting the price of sugar to go up after abolishing the subsidy and this would result in lesser consumption of sugar. Here, we can learn about the law of demand. When price of sugar increases, assuming other fact does not change, quantity demanded of sugar will decrease. So, overall population in Malaysia will consume less sugar and live with a healthy lifestyle. Is that awesome?! (Hmmm, I think I have never purchase sugar directly before...must check the food and beverages that I consume then...)

There you go, the 5 awesome things about the Malaysia budget 2014, based on my own personal opinion. You may not have to agree with my view as we are have our own way of perceiving things around us but thank you for reading :)