Sim: Budget not exciting, won’t do much to stimulate economy

Sim Kiang Chiok

KUCHING, Oct 12: Sarawak Housing and Real Estate Association (Sheda) Kuching chairman, Sim Kiang Chiok, has deemed Budget 2020 as not exciting and not much to stimulate the economy.

This given the challenging external world economic outlook, he said.

He said for instance, the increase of minimum wages to RM1,200 from RM1,100 for major cities would have some impact on the cost of doing business, as most businesses have to adjust across the whole middle and lower employee salary scale.

However, he was content that the government gave their full commitment to fund the Pan Borneo Highway until it is complete.

This will be good for Sarawak development and economic growth where, infrastructure is still lacking. The highway will open up more areas for development and growth, he said.

“With regard to Real Gain Property Tax (RGPT), moving the Base of Assessment from the year 2000 to the year 2013 for property sold after the fifth year is only a consolation to their request to abolish it after the fifth year, as this RGPT would discourage investment in the property sector and penalised saving through properties ownership,” Sim said in a statement.

He added that the only incentive on tax for small and medium enterprise (SME) is only increasing the threshold of 17 per cent tax from RM500,000 profit to RM600,000, which work out to be only about RM7,000 saving on this tax adjustment.

“There is no other reduction in this budget, which is disappointing and this makes Malaysia a less attractive or competitive country to invest in as compared to Singapore and Hong Kong.

“Our corporate tax rate is 24 per cent and the trend is to reduce below the 20 per cent for our country to be competitive,” he explained.

Sim lauded the the rent-to-own (RTO) scheme, which is very similar to staggering repayment for end-financing where the first 5-year repayment is for the interest, which as RTO, is for the rent that can be lower than the interest repayment.

However, he found the RM3 billion fund for the scheme for houses up to RM500,000 as inadequate, as it would be sufficient for only 6,000 to 10,000 houses only for the whole of Malaysia.

“The assistance to the youth in purchasing their first home, the government will extend the Youth Housing Scheme administered by Bank Simpanan Nasional from Jan 1, 2020 until Dec 31, 2021, is good.

“The scheme offers a 10 per cent loan guarantee through Cagamas to enable borrowers of full financing and RM200 monthly instalment assistance for the first two years limited to 10,000 home units.

“My reservation is that it might be inadequate for just 10,000 houses for the whole of Malaysia.”

Sim also touched on reducing supply overhang of condominiums and apartments amounting to RM8.3 billion in the second quarter of 2019, the government will lower the threshold on high rise property prices in urban areas for foreign ownership from RM1 million to RM600,000 in 2020.

He said this does not have any effect on Sarawak as the ruling in the state is different and that the state allow foreigners to buy properties above RM350,000.

“For those who are in for buying a house under the incentive, it would be good to be quick to apply as we have to compete with the other 95 per cent of the population across the South China Sea,” he concluded. — DayakDaily