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HIGHLIGHTS-Malaysia announces consumption, property taxes in 2014 budget

(Adds more details)

KUALA LUMPUR, Oct 25 (Reuters) - Malaysian Prime Minister

Najib Razak unveiled his government's budget for 2014 on Friday,

seeking to address a large fiscal deficit, shrinking current

account surplus and growing debt pile that are sources of

concern for investors and ratings agencies.

For a preview of the budget, click on

For Malaysia's economic reports, see

Malaysia's CPI hits 20-month high

Following are highlights from Najib's ongoing speech to



* Pensioners will receive a special financial assistance of 250

ringgit to assist them meet the rising cost of living.

* Government to give a half-month bonus for 2013 with a minimum

payment of RM500 to be paid in early January 2014.


* Cash handouts to households with a monthly income of below

3,000 ringgit will be increased to 650 ringgit from 500 ringgit.

* For individuals aged 21 and above and with a monthly income

not exceeding 2,000 ringgit, cash handouts will be increased to

300 ringgit from 250 ringgit.

* For the first time, cash assistance of 450 ringgit will be

extended to households with a monthly income of between

3,000-4,000 ringgit. rising cost of living borne by the lower

middle-income group.

* To implement all cash schemes, government will allocate 4.6

billion ringgit which is expected to benefit 7.9 million



* For gains on properties disposed within the holding period of

up to 3 years, RPGT rate is increased to 30 percent.

* For disposals within the holding period up to 4 and 5 years,

the rates are increased to 20 percent and 15 percent,

respectively. Malaysian property firms with exposure to this tax

change include UEM Sunrise, Mah Sing Group

and Tropicana Corp .

* Raise the minimum price of property that can be purchased by

foreigners to 1 million ringgit from 500,000 ringgit.

* Prohibit developers from implementing projects that have

features of Developer Interest Bearing Scheme (DIBS), to prevent

developers from incorporating interest rates on loans in house

prices during the construction period.

* Financial institutions are prohibited from providing final

funding for projects involved in the DIBS scheme. Malaysia's top

three banks are Maybank, CIMB and Public



* To further increase access to home ownership at affordable

prices, an estimated 223,000 units of new houses will be built

by the government and the private sector in 2014.

- Companies that specialise in affordable housing

development include Hua Yang Bhd.

* Government to allocate 578 million ringgit to the National

Housing Department (JPN) for low cost flats consisting of 16,473

housing units.

* Malaysian's government to provide 80,000 housing units with an

allocation of 1 billion ringgit under affordable housing scheme.

The sales price of the houses will be 20 percent lower than

market prices.

* Introduce the Private Affordable Ownership Housing Scheme

(MyHome) to encourage the private sector to build more low and

medium-cost houses. The scheme provides a subsidy of 30,000

ringgit to the private developers for each unit built.

* Preference will be given to developers who build low and

medium-cost houses in areas with high demand and limited to

10,000 units in 2014.

* The scheme is for housing projects approved effective from 1

January 2014 with an allocation of 300 million ringgit.


* Government proposes a special tax relief of 2,000 ringgit be

given to tax payers with a monthly income up to 8,000 ringgit

received in 2013.


* To implement goods and services tax (GST) on April 1, 2015 -

17 months from now.

* GST rate fixed at six percent, the lowest among ASEAN


* GST replaces current sales tax.

* Basic food items, transportation services, highway tolls,

water and first 200 units of electricity for domestic users per

month to be exempt from GST.

* Sale, purchase and rental of residential properties as well as

selected financial services are exempted from GST.

* PM Najib: "The reality is that inflation now is low at around

2 percent. The government is confident this will be the best

time to impose GST as inflation is minimal and under control."

* Training grant of 100 million ringgit will be provided to

businesses that send their employees for GST training in 2013

and 2014.

* Financial assistance amounting to 150 million ringgit will be

provided to small and medium enterprises for the purchase of

accounting software in 2014 and 2015.


* corporate income tax rate be reduced by 1 percentage from 25

percent to 24 percent.

* income tax rate for small and medium companies will be reduced

by 1 percentage point from 20 percent to 19 percent from the

year of assessment 2016.


* government to give one-off cash assistance of 300 ringgit to

low income households

* personal income tax rates be reduced by 1 to 3 percentage

points for all tax payers.

* individual income tax structure will be reviewed

* chargeable income subject to the maximum rate will be

increased from exceeding 100,000 ringgit to exceeding 400,000


* Current maximum tax rate at 26 percent to be reduced to 24


* measures to be effective in 2015


* Subsidy programme to be "gradually restructured"

* A portion of savings from restructuring to be distributed in

the form of direct cash assistance with the other half to

finance development projects.

* To abolish the sugar subsidy of 34 sen effective October 26



* committed to reducing the fiscal deficit gradually, with the

aim of achieving a balanced budget by 2020.

* to ensure federal debt level will remain low and not exceed 55

percent of GDP.

* government to conduct audits on projects valued at more than

100 million ringgit during its implementation.


- Securities Commission to introduce the a framework for Social

Responsible Investment (SRI) Sukuk, or Islamic bonds, to finance

"sustainable and responsible" investment initiatives.


- Government to allocate six billion ringgit allocated for

agriculture programmes.

* Says to 243 million ringgit allocated for rubber, palm oil

and cocoa replanting as well as forest plantation programmes.

Main plantation companies in Malaysia include Sime Darby

, IOI Corp and KL Kepong.


- Government to allocate 3 billion ringgit in soft loans under

the Maritime Development Fund through Bank Pembangunan Malaysia.

* The fund is to provide financing to encourage the development

of the shipping industry, shipyard construction, oil and gas as

well as maritime-related support activities.


- To replace existing air traffic control and management system

in Subang, a new air traffic management centre costing 700

million ringgit will be built at Kuala Lumpur International

Airport (KLIA).

* Kota Kinabalu, Sandakan, Miri, Sibu and Mukah airports in

Sabah and Sarawak to be upgraded with 312 million ringgit


- Malaysia Airports manages and operates all airports

across the country except for one in Johor.


* Public investments to reach 106 billion ringgit. Projects to

be implemented include:

- A 316-kilometre West Coast Expressway. Locally listed Kumpulan

Europlus Bhd owns 80 percent of the project, while IJM

Corp owns the balance 20 percent.

- Double-tracking rail project along west coast Malaysia. The

project is carried out by as a joint venture between MMC Corp

and Gamuda.

- Various projects from state oil firm Petronas under

its 300 billion ringgit capex programme, including a

petrochemicals plant in southern Johor state.


- To carry out second phase of high-speed broadband project

with the private sector involving 1.8 billion ringgit

investment. State-linked telco Telekom Malaysia Bhd

is involved in the project.

- To increase Internet coverage in rural areas, 1,000

telecommunication transmission towers will be built in the next

three years, with an investment of 1.5 billion ringgit.

- To increase Internet access in Sabah and Sarawak, new

underwater cables will be laid within three years at a cost of

850 million ringgit.

(Reporting by Kuala Lumpur bureau; Editing by Niluksi