The Prime Minister, YAB Dato` Seri Abdullah Ahmad Badawi tabled the 2008 Budget on Friday, 7 September 2007.
The theme of the 2008 Budget ¡°Together Building the Nation and Sharing Prosperity¡±reflects the Government¡¯s ’saspirations that the wealth of the nation, will continue to grow and benefit all Malaysians.
The 2008 Budget which proposes expenditure of RM176.9 billion is a generous budget as the
proposed expenditure has increased approximately 10.9% from 2007. The main objective is to strengthen the nation¡¯s infrastructure, human capital and delivery systems while at the same time ensuring that Malaysians enjoy an improved standard of living as the country prospers.
This budget is focused on three main strategies
(1) Enhancing the nation¡¯s competitiveness;
(2) Strengthening human capital development;
(3) Ensuring the well-being of all Malaysians.
1. Reduction in corporate tax rate by one percentage point to 26% for Year of Assessment (YA) 2008 and to 25% for YA 2009.
2. Replacement of the dividend imputation system with a single tier tax system.
3. Improvement in tax benefits for Islamic fund management activities and Takaful businesses.
4. Overcoming the incidence of double taxation in life insurance business.
5. Full tax exemption on the value of increased export given to recipients of Export Excellence Award (Merchandise) be extended to recipients of Export Excellence Award (Services) and the Brand Excellence Award.
6. Exempting small and medium enterprises from the requirement to submit tax estimates for the first 2 YAs.
7. Non-application of balancing charges on the disposal of industrial buildings to Real Estate Investment Trusts (REITs).
8. Rationalisation of Information and Communication Technology incentives by centralizing such activities in Cybercities and Cybercentres.
9. Enhancing the tax incentives for involvement in generating renewable energy and conservation of energy. Tax exemption on income from trading of certified emission reductions.
10. Removal of the service tax thresholds for professional, consultancy and management services.
11. Streamlining of tax treatment for expatriates working for International Procurement Centres and Regional Distribution Centres.
12. Allowing Labuan offshore companies to elect to be taxed under the Income Tax Act 1967 .
13. Extending stamp duty exemption for mergers and acquisitions of listed companies.
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