Talking

Malaysian government announced that the prices of oil,gas and sugar will increase into a proper stage effective from 16th July,2010 in order to cut some subsidies.The details are as follow:

From Friday, the subsidies for sugar, petrol, liquefied petroleum gas and diesel will be cut as part of the gradual subsidy rationalisation programme, according to a statement from the Prime Minister’s office on Thursday.

The price of sugar will go up 25sen to RM1.75 per kg; LPG will go up 10sen to RM1.85 per kg; petrol RON95 will be up 5sen to RM1.85 per litre and diesel will be up 5sen to RM1.75 per litre.

RON 97 will no longer be subsidised. It will be subjected to a managed float, where the price will be determined by the automatic pricing mechanism, the statement said.

(Reported by TheStar)

In fact,I have totally agreed the movements of cutting the subsidies and I had talked about it one month ago.Oil and gas have been limited resources all over the world and they will create a lot of pollutions.By increasing the prices of them,it could reduce such issues.Eating too much sugar will cause diabetes.Higher price of sugar will let people reduce the consumption of it and so being much healthier.However,I also care about how the government will monitor on spending on savings of those subsidies to affirm that the savings will put into places where it could benefit all Malaysians.

I do hope that the accounts of Malaysian government could be more transparent and the officers could also do the jobs hard and think of the citizens in every second as they are public servants.

The Prime Minister of Malaysia Najib claimed that GDP in Q1 2010 is 10.1% greater than the same period of last year.It seems to be very good news as it indicates Malaysia’s economy is walking out of the mess and turning into a right way.However,some people put some arguments out because they see the growth of Malaysia’ economy is based a large deficit and creating a huge amount of debts.

Malaysia government provided RM18.6billion as the subsidies to petrol price,gas price and so on.It is almost 11% of GDP for the year,higher than many other developed and developing countries in the world(France-1.4%,UK-0.7%;Indonesia-2.7%,India-1.6%,China-0.7%).However,the expenses on subsidies are actually only ranking at No.4 of total expenses.The No.1 expense is for salary and other bonus of civil servants-1.22million of civil servants cost RM52.9billion for the last year-it’s around 3 times of subsidies and 33.7% of the total expenses.That means each public servant could get average income for the year at RM43360,at the same time,the Per Capita GNI(Gross National Income) of Malaysia is RM23567(ie. Malaysia has approx. 27.7million citizens in 2009.)

From the points I can see,I suggest the government smoothly cuts down the subsidies,but also need to cut down the number of public servants by increasing the operational efficiency and applying e-solutions and automation systems in order to facilitate the administrations among different departments.

Malaysia might not be another Greece so soon,but if the government doesn’t know how to control the debts and deficit,I don’t think a better future will be close to the people in this land.On the contrary,the whole country will probably suffer the pain later.

Currently I’m planning to buy a property as my first home with my fiancée.In order to know more about purchasing a property,I talked to some bankers,lawyers,agents and property investors who have professional knowledge and experience.I feel that the reintroduced 5% RPGT(Real Property Gains Tax) actually helps the buyers who want to get the property in this year.

1.what is RPG?

The RPG is the gain between purchasing cost and selling price of the same property.

For example,Mr. A bought an apartment X at RM80,000 in 2000.In 2010,he wants to dispose the apartment at RM120,000.The different is the RPG which is RM40,000(RM120,000-80,000).

2.What is RPGT?

Simplified it,RPGT is the tax charged based on RPG.In Budget 2010,the Malaysian government proposed to reimpose 5% RPGT irrespective of the year when the property is disposed and it would be effective from January 1st,2010.Of course,some exemptions are provided by the government:

*Disposal of a residential property once in a lifetime.
*Transfer as gifts between parent and child, husband and wife, grandparent and grandchild; (No exemption for transfer between sibling) and 
*Exemption of RM10,000 or 10% of the chargeable gain, whichever is greater, for each disposal of a property by an individual.

Continue with my previous example,

1.If it’s the first time,for Mr. A,to dispose a residential property,the RPG will be exempted to charge that 5%.

2.If Mr. A is not making sale on the property,but transferring the title to his wife or child or grandchild,no RPGT will be charged.

3.If Mr.A is not fulfilling the above 2 points,he has to pay for RPGT.However,some amount will be exempted.The details are as below:

The chargeable RPG is RM40,000 as per calculated,so 10% of the chargeable gain will be RM4,000(10% * RM40,000).As the exemption could be the greater of RM10,000 or 10% of the chargeable gain.Thus,in this case,the amount of RPG exempted for RPGT will be RM10,000 and the rest of RPG(RM30,000) will be charged for the RPGT at 5%,which is RM1,500.

That means after contributing the RPGT to the government,Mr. A could only get a profit of RM38,500(RM40,000-RM1,500) in 2010 by selling the apartment at RM120,000.

On the other words,if Mr. A could dispose the apartment at RM118,500 before 2010,he still can get the same profit.

Therefore,provided that Mr. A is really willing to get some targeted profit(saying RM38,500),he definitely will agree to price the property at RM118,500 in 2009.If going to 2010,he will have to increase the price to RM120,000 in order to achieve the expected profit.

That’s why I think to buy a property before 2010 is a very good choice because we’re able to persuade the seller to set a better price for a win-win situation.Now I just wish the seller who may meet in the near future knows RPGT too.

The topic of Budget 2010 is ‘One Malaysia, Together We Prosper’.The main concept is to develop the country towards a united,peaceful and wonderful land.

Three strategies:

- driving the country towards a high-income economy,

- ensuring holistic and sustainable development,

- focusing on the well-being of the rakyat.

The rest reported by TheStar are:

(The sentences in bold are which may benefit for low and middle income people,inclusive of students)

(more…)

Today ministry of Finance in Malaysia will submit the budget for the coming 2010.The Prime Minister Dato’ Najib is also the minister of Finance.I think he had to pay attention to this budget because Malaysia was just suffered by the economic downturn seriously and now difficultly walking out of it.The government ran some mini budgets during the past several month to support country’s economic by adding deficit.So the forthcoming budget is at the crossroad that may push the economic up or pull it down to the jungle.

In front of the new budget,Najib must give out the ways for two main points at the same time:

• To keep supporting on business activities and relieving financial pressures of citizens by issuing policies that benefit both companies and consumers
• To cut the deficit into a proper range

I will post the hot points tonight when the budget released to the public.