Wednesday, January 26

Key budget measures will be put in place to compensate impact of GST on households

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KUCHING: Key measures of Budget 2015 will be to compensate households for the Goods and Services Tax (GST) which will come into effect in April 1 next year.

Economist Alan Tan from Affin Investment Bank Bhd (Affin Research) said in the 2015 Budget, the government will likely announce some form of direct compensation arrangements through the distribution of the 1Malaysia People’s Aid (BR1M).

Senior government officials have recently said that handing out BR1M to households with a monthly income of below RM3,000 will likely be increased by an additional RM300 from last year’s allocation of RM650 to RM950 next year.

The GST full list of zero-rated items and exemptions on consumer items will likely be announced in the upcoming 2015 Budget.

“Budget 2015 will also focus on a targeted fuel subsidy system,” Tan added.

“The government is expected to continue with its subsidy rationalisation programme by introducing a new targeted subsidy system to be announced in the coming Budget.

“The proposed targeted subsidy system will ensure subsidies that benefit the low and medium-income groups. We believe the actual implementation of the targeted system will likely take effect only in 2015.”