The Prime Minister and Minister of Finance, YAB Dato` Seri Abdullah Ahmad Badawi tabled the 2009 Budget on Friday, 29 August 2008.
The 2009 Budget is focused on enhancing the well being of all Malaysians. For this purpose, the 2009 Budget will focus on three specific strategies, namely: (1) Ensuring the Well Being of Malaysians; (2) Developing Quality Human Capital; and (3) Strengthening the Nation¡¯s Economic Resilience.
2009 Budget Highlights
(1) Reduction in personal income tax rate from 28% to 27% for chargeable income exceeding Ringgit Malaysia (RM) 250,000. Reduction in personal income tax rate from 13% to 12% for chargeable income exceeding RM35,000 to RM50,000.
(2) Full exemption on interest income received by individuals from moneys deposited in financial institutions.
(3) Specific exemption on certain allowances, benefits in kind and perquisites received by
(4) Increase in deductions for contributions to charities from 7% to 10% of aggregate income for companies.
(5) Enhancing group relief to 70% of current year losses from the current 50%.
(6) Accelerating the capital allowance claim on information and communication technology equipment to 1 year.
(7) Alleviating the cashflow burden of small and medium enterprises by allowing 100% capital allowance (CA) on expenses incurred on plant and machinery acquired.
(8) Introduction of provisions specifically addressing transfer pricing and thin capitalisation.
(9) Introducing advance pricing arrangement to determine transaction prices for income tax purposes.
(10) Exemption on fees or profits earned by qualified institutions from arranging, underwriting, distributing and trading of non-RM sukuks issued in Malaysia.
(11) Revision in the withholding tax rates on foreign institutional investors and individuals to 10% for receipt of distributions from Real Estate Investment Trusts (REITS).
(12) Imposition of 10% withholding tax on payments made to non-residents with respect to their income falling under Section 4(f) of the Income Tax Act, 1967.
(13) Tightening of eligibility for Reinvestment Allowances (RA).
(14) Import duty and sales tax exemption on equipment used for the generation of energy from renewable sources and for energy conservation.
(15) Increase in excise duty rates on cigarettes.
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