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Beneficiaries
The main beneficiaries sector is Banking and Islamic Financial Sector:
To encourage banks to expand overseas and establish a regional presence, the Government has proposed that Malaysian-owned banks be given tax exemption for five years on income received from their new branches or remittances from subsidiaries overseas, operating within the three-year period, from the year of assessment 2007.
This would encourage local banks to explore and increase their presence in new and competitive regional and global markets.
Currently, Maybank has a large branch network overseas especially in Singapore. Public Bank Bhd has aggressively expanding overseas like Vietnam and China and has a subsidiary in Hong Kong. Bumiputra-Commerce Bank, however, expand via Merger & Acquisition, apparently, this unable to benefit from the tax break. Hong Leong Bank recently has obtain approval to open branch and representative office in Vietnam and China respectively.
Other than that, government also announced 6 measure to boost Islamic finance. This encouraging foreign players to set up their Islamic financial base in Malaysia and local banks to venture abroad with their Islamic banking expertise. Currently, Public Bank Berhad has the largest Islamic finance function in Malaysia.
Updated link: Towards a global Islamic financial hub
UMNO Assembly Budget
Generally, Budget move from traditional October to September ahead of UMNO assembly was seen as an UMNO Assembly budget. With announcement of bonus to civil servant plus project announced for small bumiputra contractor in construction industry has been expected.
Updated link : Potential winners (large and small- to medium players )for projects under the 9MP
Sector woes likely to end
Towards 70 million population policy
70 million population policy was announced by Tun Dr Mahathir. However, Budget 2007 indicated that Pak Lah never abandon the policy. Government removal of the examination fees for the UPSR, PMR, SPM and STPM will be a great help to big family with large number of children. Childcare centre will be establishing in all government department. This is a great relief for working mother and promote 70 million population policy
Promote entrepreneurship
Reduction in Corporate Tax to 27% in 2007 and 26% in 2008 promote setting up of company or entrepreneurship. This is because Personal Income Tax still at 28% at highest rate while company with profit less than RM500,000 tax at 20% while Profit more than RM500,000 tax at 27%. Thus, its time high remuneration employee, sole proprietor or partnership for from a limited company if your income exist RM500,000 and you pay tax more than 20%.
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