Ching Chee Pun. Professional qualification: Bac. Accounting and Management Control, FCCA, CFP, CA

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1 Professional qualification: Bac. Accounting and Management Control, FCCA, CFP, CA Ex-Deloitte Kassim Chan as Senior Tax Consultant and Senior Auditor Have served MNC clients such as Fajar Group, Lion Group, Triumph International, Arab Malaysia Bank etc CFP, FCCA, CA Specialized in Corporate Financial Planning, Tax & Accounting Analysis, Funding Proposal, M&A and IPO consultancy Ching Chee Pun

2 Who will benefit most from Budget 2018?

3 Contains World Economy Malaysia Economy Transportation, Education, Tourism, Sport Digital Free Trade Zone Entrepreneur, SME Government Servant Personal Woman Housing Others Where the money come from? Summary

4 World Economy 2018 USA Interest hike China Economy Recover? Middle East Oil Price Stable (USD66) (if Oil price increase, Malaysia good too) Global economy is expected to grow by 3.6% this year to 3.7% in 2018

5 Three international credit rating agencies rate Malaysia's credit rating of "A-" and stability Malaysia Economy Economic Performace 2.8% Fiscal Deficit (2017 : 3% Fiscal Deficit) (21 years continues Deficit) (RM39.8B) (cant hit 2020 vison to zero) 5% - 5.5% GDP (2017 : 5.2% to 5.7% GDP) (Half year 2017 already hit 5.7%) Income Per Capita RM42,777 (2017: RM40,713) Internatioanl Reserves : RM428.7b (as at 13 October 2017) Unemployment: 3.3% Inflation: % SME can contribute 41% of GDP. GST RM3.8b (2018), RM27b (2015), RM38.5b (2016), RM41.5b (2017)

6 2018 Malaysia Economy Revenue: RM239.86B (2017 : RM219.7B) (increased by 6.4%) Expenditures: RM280.25B (2017 : RM265.9B) (increased by 5.4%) (income tax 42.6%, Indirect Tax 22.8%, Loan 14.4%, Non Tax 17.2%, Others 3%) 2018 Operating Expenditure: RM234.25B (83.6%) Allocate for Government Servant Salary : RM79.1B (2017 : RM77.4B) Development Expenditure: RM46B (16.4%) 2017 Operating Expenditure: RM219.9B (82.7%) RM77.4B allocate for Government Servant Salary

7 2018 Malaysia Summary Government Servant: RM79.1B (2018) 33.7%, RM77.4B (2017) 35.2% Operating Expenditure: 83.6% (2018), 82.7% (2017), 80.5% (2016) Developing Expenditure: 16.46% (2018), 17.3% (2017), 19.6% (2016)

8 2018 Malaysia Economy RM depreciated 40% to 50% Country Debt 51% against GDP in 2016 Country Debt reach 53% against GDP in 2017 In 2018, sure will maintain below 55% Government Guarantee is 15% since 2013

9 Transportation 2018 MRT2 Project Sungai Buluh-Serdang-Putrajaya (52km): (RM32b) High Speed Rail Project connecting Kuala Lumpur Singapore (350km); Transportation Development Fund: (RM3b) Public Transportation Fund for working capital and procurement of buses and taxis: (RM1b) Upgrade of Pulau Pinang and Langkawi International Airports; Upgrade of airports at Sultan Ismail Petra, Mukah and Sandakan

10 Transportation 2018 Batu Tiga & Sg Rasau (Selangor), Bukit Kayu Hitam (Kedah) & Eastern Dispersal Link (Johor) tolls will be abolished. Free Trade Zone: Pulau Pangkor will be a new Free Trade Zone (except for Tobacco, cigarettes and vehicles) Upgrading of Free Trade Zone of Bukit Kayu Hitam.

11 Education 2018 The government will allocate RM2.5 billion to repair schools by using the Industrial Building System (IBS) within two years, RM500 million for West Malaysia and RM1 billion for Sabah and Sarawak respectively A total of RM550 million was allocated to the school maintenance and improvement fund, including RM250 million for the Chinese Primary school, Thai Primary School, Church, School Hostel, Mara Science Primary School and Government Subsidy Religious School respectively. (RM50m) each) The government allocates RM328 million to help low-income students, benefiting 3.2 million students nationwide (RM100 per person) University Student and Form 6 students will receive RM250 worth of coupons, which will benefit 1.2 million students

12 Education 2018 Government University will receive a special donation of RM400 million for research and development in helping local universities, especially Malaysia University, to be the top 100 rangkinguniversities in the world. Low-income students will have an additional loan of RM2 million The discount period for PTPTN will be extended from the end of this year to Dec 31, Grace period of 12 months instead of current 6 months after graduation for loan repayment. Increased maximum loan for students from B40 families.

13 Agricultural 2018 Financial assistance RM6.5b to farmers, rubber tappers, smallholders and fishermen: Upgrade plantation roads and improve irrigation infrastructure: (RM500m) Developing and replanting for oil palm: (RM140m) Agricultural programmes as new sources of income: (RM200m) Coconut replanting (CARECA and MATAG) by cluster: (RM50m) Financial assistance of RM200 for 3 months prior to paddy harvesting season: (RM150m)

14 Tourism 2018 Visit Malaysia Year 2020 SME Tourism Fund with interest subsidy of 2%: (RM2b) Tourism Infrastructure Development Fund: (RM1b) Tourism promotion and development programme: (RM500m) Expand evisa Regional Hub: Tax incentive for investment in new 4-star and 5-star hotels extended for 2 years; and Tax incentive for tour operating companies extended to 31 December 2020 Listing Pulau Pangkor as tax free island, except for alcohol, cigarettes, motor vehicles

15 Tourism 2018 New airport in Tioman is being planned Special tourism healthcare incentive increase to 100% RM120m loan to one Malaysia mobile vehicle restaurant

16 Sport 2018 Allocation of RM1 billion to the sports sector, including Healthy Malaysia (FitMalaysia), National Sports Day, athlete training, youth training program and national football development plan

18 Digital Free Trade Zone (DFTZ) 2018 The current global entry into the industry 4.0 and the digital economy era, the Chinese government will also strive to implement the Malaysian digital policy, and in the domestic investment strategy fund allocated RM255 million to enhance the smart manufacturing equipment to support the development of industry 4.0. Cyberjaya Futurise Centre and expansion on regulatory sandbox to elevate innovation

19 Digital Free Trade Zone (DFTZ) 2018 Tax Incentives Extend the incentive period for Accelerated Capital Allowance on automation equipment Accelerated Capital Allowance Incentive up to 200% for manufacturing and manufacturing-related-services sectors Capital Allowance Incentive for ICT equipment beginning

20 Entrepreneur/ SME SME Financing (2018) Skim Jaminan Pembiayaan Perniagaan for working capital and services sector: (RM7b) Government Guarantee loans under SJPP to enable SMEs to automate production: (RM1b) Shariah-compliant SME Financing Scheme with subsidy rate of 2%: (RM1b) Soft loans, grants and training programmes for SME under SME Corp: (RM200m)

21 Entrepreneur/ SME SME Financing (2018) Development of halal industries and products under various agencies: (RM82m) RM1.5 billion for commercial lending purposes, using intellectual assets as collateral and providing up to 80% of credit

22 Entrepreneur/ SME Mirco Financing (2018) Loan fund under Tabung Ekonomi Kumpulan Usahawan Niaga (TEKUN): (RM500m) Amanah Ikhtiar Malaysia (AIM): (RM200m) Rural Economic Financing Scheme (SPED) for rural Bumiputera entrepreneurs:rm80m RM1bil funding for venture capital investment RM50m to Kojadi

23 Entrepreneur/ SME RM100m to Mdec for Start up Social Program RM120m loan to one Malaysia mobile restaurant RM5000 allowance to buy New Car to start business in Grab

24 Entrepreneur/ SME High-impact strategic fund under MIDA: (RM200m) Matching Grant under Domestic Investment Strategic Fund to enhance smart manufacturing facilities: (RM245m) ( 2017 : Allocate to MIDA for RM522m for incenties & grants ) Green Technology Financing Scheme to promote investment in green technology industry: (RM5b)

25 Entrepreneur/ SME/ Startup My View P2P / Crowd Funding Equity Financing + IPO Program SME Listing Board Rehabilitation Scheme

26 Entrepreneur/ SME/ Startup My View Problem SME lack of funding SME lack of good manpower (rely on foreigner) Cost of doing business increase RM depreciate lead to Cost increase Threat of Alibaba Lack of Export SME Grants why difficult because 1) Paper work weak 2) Government Servant not helpful 3) Lack of A&P to promote

27 Entrepreneur/ SME/ Startup - pre My View Action Reduce levy Reduce import duty Go Automation SME must prepare themselve one belt, Asean..middle east...etc...a lot of market governmet servant must act consistent to the top plan

28 Export 2018 Encourage Export Export promotion programmes: RM150M provided through National Export Promotion Funds (2017 : RM130M) Loans to enhance automation of local furniture production for export: (RM100m) Insurance coverage credit facility for SME exporters: (RM1b) In 2017, Export of palm oil, rubber, cocoa and pepper: RM286M allocated to increase exports (But not in 2018)

29 Public Servants, Senior Citizen, Disable Person 2018 Earlier 1 hr Time Off for Expecting Parents in Govt Sector. Bonus of RM1500 for Govt Servants. Bonus of RM750 for Govt Pensioners. Increased allowance to Senior Citizens from RM50 to RM350. Increased allowance to Person With Disabilities & Caretakers of PWD by RM50 per month.

30 Public Servants My View Government servant number 1.6m For the past 10 years government servant increase 60% Expect one and half month bonus in 2018 Ratio : - Malaysia to 1 (included teacher and army) Singapore to 1 Indoneasie 110 to 1 China 108 to 1 Japan 128 to 1

31 Individual 2018 Personal Income Tax (By right after GST, should reduce automatically) Reduction in individual income tax rates: RM20,001-35,000: 5% to 3%; RM35,001-50,000: 10% to 8%; and RM50,001-70,000: 16% to 14%; Reduction of 2% tax for those income below RM70,000. An estimate of 261,000 ppl would not be paying tax. Tax exemption for rental income of 50% up to RM2000 per month.

32 Individual 2018 BRIM of RM1200 to deserved individuals. BR1M- 7Million recipients with allocation of RM6.8B E-Kasih- From RM1,050/ RM1,000 increase to RM1,200 2.Households earning between RM3,000 to RM4,000- RM850 increase to RM900 3.Single earning below RM2,000- RM400 increase to RM450

33 Individual Note BRIM 21 亿 30 亿 45 亿 52 亿 59 亿人数 420 万 680 万 790 万 720 万 740 万 2017 and 2018 BR1M- 7Million recipients with allocation of RM6.8B BRIM still to those working in Singapore but no register in malaysia

34 Women Woman entrepreneur comprise 20.6% in the SME Entrepreneur Mandatory maternity leave for private sector increased to 90 days. 30% women representation requirement as Board of Directors in GLC by end of months Tax exemption for income for women re-etering workforce.(after at least 2 years of work break) SSP1M Education Tax relief will continue for the next 3 years. Childcare facilities for new buildings (start from KL)

35 GST Services provided by local authorities will not be subjected to GST; Reading materials comprising all types of magazines and comics will be zero-rated; GST relief for cruise operators; Full GST relief for services of construction of school buildings and houses of worships funded through donations; GST relief for imports of oil and gas-related equipment under lease agreement; GST relief for imports of big ticket items such as aircraft and ship by airlines and shipping companies; and Management and maintenance services of stratified residential buildings are not subjected to GST.

37 Affordable Housing Note Rent First, Buy Later EPF Account 2 for 40% withdrawal DIBS open to First Time Buyer (less than 500K below and cannot resell within 5 years; if not penalty) Should lower the RPGT and Stamp Duty to boost market Relaunch MyDeposit Family income less that RM10k and house value less than 500K for FIRST time buyer, special scheme (HOAP) Give Subsidiary to IBS Offer higher limit to foreigner Higher loan limit to 3rd house

38 Others Allow employers to hire foreign domestic helper directly without agent Bonus RM1500 special assistance to Village Head. RM75mil for Development & Restoration of Chinese New VIllage RM65 million to the development of Chinese village, another RM10 million as a house maintenance costs Each Malaysian child born from Jan 1, 2018 to 2022 will be given RM200 worth of units in unit trust Amanah Dana Anak Malaysia 2050 (Adam50).

39 Where the Money come from? Airport tax Hotel room tax Foreign workers' levi tax (2 million foreign workers are registered and 7 million are not registered) Rehiring plan for foreign workers Anti cigarettes and smuggling activities Tax Audit (Inland Revenue Agency and GST ) 2017 Penalty up to 100% (Tax audit); Current 45% only

40 World Economy 2018 USA Interest hike

41 Where the Money come from? Reduce Petroluem Tax ( % of Total Collection) Increase GST ( %) Company Tax ( %) Think cannot reduce government servant salary, so need to increase Tax income Tax Audit will focus on Business in Oversea GST will impose those Internet Marketing which doing online business

42 Where the Money come from? 2018 IRB and Custom VERY efficient Tax Audit and Tax Investigation (EXTRA PORTION) GST 2015 : 9.8B 2016 : 6.378B 2017 : 6.148B Total 22.4B GST 43.8b (2018) GST RM27b (2015), RM38.5b (2016), RM41.5b (2017) Expenditures: RM280.25B (2017 : RM265.9B) (increased by 6.5%) (income tax 42/6%, Indirect Tax 22.8%, Loan 14.4%, Non Tax 17.2%, Others 3%)

43 Conclusion Wealth Creation

44 Q & A

45 2018 Malaysia Economy External trade Gross exports: 3.4% Forex (USD/MYR): 4.34 Unemployment: 3.3% Inflation: % Promote investment, trade and industry. Domestic investment is expected to increase to 6.7%, next year's private investment will exceed 260 billion ringgit. The theme is to promote inclusive economic prosperity, balance the religion and secularity for the well-being of the people, and move towards the 2050 National Transition Plan (TN50)

46 World Economy 2018 USA Interest hike

47 Agricultural 2018 Rubber replanting programme and infrastructure to increase production of latex: (RM200m) My View : Youth can explore enter into agricultural indsutry

49 Affordable Housing 2018 PROJECTS UNIT AGENCIES People s Housing Programme (PPR) 17,300 JPN Rumah Mesra Rakyat 3,000 SPNB PR1MA 210,000 PR1MA PPA1M 25,000 JPN MyBNHomes 600 NSU MyDeposit & MyHomes 2,000 JPN

50 Affordable Housing 2018 Maintenance and refurbishment of houses including 1Malaysia Maintenance Fund: (RM200m) Stamp duty exemption for loan agreement and letter of consent to transfer Tax exemption on rental of 50% for rent up to RM2,000 (a lot of people no declare)

51 Affordable Housing As at 30 June 2017, Lower Cost Housing Project = 184 (118 completed); provided houses. Local government also spend RM12b to build 130k to 180k low cost house Government projects Rent to Own (Subsidy 120,000 per unit) Youth Transit Home (Rent below 20% to 30% market value for 5 years) SPP (provide RM60,000 to build house on his own land, since 1979 got 6122 owner benefited, total amout is 188,500,000 (188m) My Home (subsidy up to 30,000 unit per FIRST buyer) My Deposit (1451 FIrst time buyer benefited) PRIMA PPA1M (for government servant only) RUMAWIP (local government project)

Budget 2018: Summary & Comments

Budget 2018: Summary & Comments October 28, 2017 To: Our valued clients, friends and affiliates. BUDGET 2018 SUMMARY & COMMENTS We are proud to once again present to you this year our BUDGET 2018, Summary