2011 BUDGET COMMENTARY & TAX INFORMATION

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1 (225750T) The Malaysian Institute of Certified Public Accountants (3246-U)

2 Copyright October 2010 by The Malaysian Institute of Certified Public Accountants (MICPA), Malaysian Institute of Accountants (MIA) and Chartered Tax Institute of Malaysia (CTIM). All rights reserved. No part of this publication may be reproduced or transmitted by any or other means, including electronic, mechanical, photocopying and recording or in any information storage and retrieval system, without the prior written permission of the publishers. The views expressed in this publication are not the official opinion of the MICPA, MIA and CTIM, their Councils or any of their Committees. The views are provided gratuitously and without liability. Neither the MICPA, MIA and CTIM, their Councils or any of their Committees shall be responsible or liable for any claims, loss, damages, costs or expenses arising in any way out of or in connection with any person relying upon such views. Users are reminded that the 2011 proposed tax changes may differ in their final form when passed by Parliament. Published by The Malaysian Institute of Certified Public Accountants (3246-U) 15 Jalan Medan Tuanku, Kuala Lumpur Tel Fax Website Malaysian Institute of Accountants Dewan Akauntan 2 Jalan Tun Sambanthan 3, Brickfields, Kuala Lumpur Tel Fax budgetbooklet@mia.org.my Website Chartered Tax Institute of Malaysia (225750T) Unit B-13-2, Block B, 13 th Floor, Megan Avenue II No. 12 Jalan Yap Kwan Seng Kuala Lumpur Tel Fax secretariat@ctim.org.my Website Printed by Vivar Printing Sdn Bhd ( D) Lot 25, Rawang Integrated Industrial Park Mukim Rawang, Jalan Batu Arang, Rawang, Selangor, Malaysia Tel Fax

3 To our valued clients/associates With compliments from Cover design In line with the Prime Minister s aspirations for the achievement of a high income economy, the upward spiral design conjures an image of rising trends in income, creativity and knowledge juxtaposed against the menial backdrop represented by a construction worker as the country strives to break through the middle income conundrum.

4 Editorial Board Poon Yew Hoe (Chairman) Technical Reviewers Harvinder Singh Jeyapalan Kasipillai (Dr) Ong Chong Chee Agnes Funk Alexis Heng Yah Wei Amy Chong Ai Mei Andrew Woo Saw Wei Ann Lam Carol Eng Chan Tuck Keong Chan Wei Yin Chau Sau Lai Chen Choo Pin Chin Yau Fen Christopher Low Choo Choon Lin Connie Tian Kang Nee Daniel Soo Choon Han Daniel Woo Derek Chan Diana Sim Ding Suk Peng Eunice Cheong Choi Hoong Fadzlee Sani Fennie Lim Phaik Hui Foo Meng Huei Foong Pui Yen Grace Lim Ho Yi Hui How Yong Sook Mui Jackie Ngim Wai Yee Joanne Hooi Joseph Teoh Joshua Voon K. Sandra Segaran Katrina Oh Kek Yee Kenneth Lim Kevin Chin Khaw Wei Seng Khoo Huey Yeen Kuok Yew Kuan Kwek Saw Hong Lau Mei Yee Lau Wing Quan Lee Chong Hoo Lee Hwee Lin Lee Yuan Sin Leong Wei Liang Liaw Pey Shan Lim Bee Chin Lim Cheang Kee Lim Chia Chian Lim Yiek Lee Liza Ooi Yap Lin Loh Hoong Zhen Long Yen Ping Mervyn Ong Hean Chong Michelle Chuo Siew Ying Murugan Anbanantham Ng Chooi Fong Noor Rida Hamzah Pauline Tan Phang Siew Ming Pritam Singh Ros Zamrilah Binti Abdullah Sabrina Sim Siok Tiang Shalini Chandrarajah Sim Kwang Gek Song Sylvia Sumathi Ayadurai Syazwani Syed Tamim Tan Hooi Beng Thomas Teoh Lian Gim Vong Tze Wee Voon Yuen Hoong Wan Chee Khei Wong Fai Yee Wong Man Yee Wong Tzh Shin Woon Yoke Lee Yap Lai Han Yap Mei Sei Yee Chia Ping Yeoh Wen Ching Zen Chow Acknowledgement The 2011 Budget Commentary & Tax Information is published by the MICPA, MIA and CTIM in association with the following accounting firms: Advent Tax Consultants Sdn Bhd BDO Tax Services Sdn Bhd Crowe Horwath KL Tax Sdn Bhd Deloitte KassimChan Tax Services Sdn Bhd Ernst & Young Tax Consultants Sdn Bhd KPMG Tax Services Sdn Bhd Mazars Taxation Services Sdn Bhd PricewaterhouseCoopers Taxation Services Sdn Bhd SJ Grant Thornton

5 Foreword On the national economic front, this year s headlines have been dominated by words such as middle income trap, high income society and erosion of international competitiveness. Recent concerns include the spectre of the bubbling property market, rising cost of living, withdrawal of government subsidies, introduction of GST, etc. Clearly, our Government is besieged by these and other issues as we strive to move up another level as a nation. Happily, the Government has looked at the mirror, identified our national shortcomings and strived to explore solutions. They have neither been in denial nor unwilling to make a change. We comment them for their bold moves. We now need to roll up our sleeves and put on our leadership mantles. The business leaders have to lead their businesses to better profits and stronger balance sheets, the Government to lead by exemplary political leadership and sound governance, and the workers to lead by outstanding industriousness and stewardship. With that would come an enlargement of the economic cake that all the citizens can share in. The secret is simple but it takes all of us to make it a success. For the citizen, raising disposable income would mean a reduction of average tax liability. On the receiving end, the Government would need to increase taxes to balance their budget. The twain must meet because tax collection is a zero sum game. There is no free lunch in economics. Tax rates cannot go down if the Government intends to collect more taxes. The Government may diversify its sources of taxation for example by taxing consumption via GST but the net result is that the total tax on the population will remain the same unless the income and wealth of the population increase. In this respect, the Government has rightly pointed out that it has to adopt a strategy of raising national income levels because by doing so, the citizens will not only enjoy a higher standard of living, the Government will meet its taxation targets. The balancing of the budget via GST or other taxes would be a good move to stabilize tax collection for the future but it may not reduce the tax burden on the average taxpayer. In separating the forest from the trees, growing the economic cake would be the direction to take. What has the Government done in this Budget and what it should do will make interesting reading. Whatever the case, the past is history from which we can draw many lessons. The future is the clay in our hands and it is up to us, the sculptor, to shape it as we wish. Written by: Poon Yew Hoe 15 October 2010

6 Malaysia Office Commerce Clearing House (M) Sdn Bhd ( M) Suite 9.3, 9 th Floor, Menara Weld 76 Jalan Raja Chulan Kuala Lumpur Tel Customer Service Hotline Fax support@cch.com.my Website Head Office CCH Asia Pte Limited (Reg No K) 8 Chang Charn Road #03-00 Link (THM) Building Singapore Tel (65) Customer Support Hotline Fax The MICPA, MIA and CTIM thank CCH Asia Pte Limited for their invaluable collaboration on the publication of the 2011 Budget Commentary & Tax Information.

BERJAYA AUTO BERHAD [Company No M] (Incorporated in Malaysia)

BERJAYA AUTO BERHAD [Company No. 900557-M] (Incorporated in Malaysia) An Extract of minutes of the Sixth Annual General Meeting of the Company held at Perdana Ballroom, Bukit Jalil Golf & Country Resort,