Issue No.


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Buy local, Think long-term

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In his recent budget presentation, Finance Minister Dato' Anwar Ibrahim unveiled a series of confidence-boosting measures to steer the economy forward. Overall, it is a sensible budget, not as painful for man in the street as everyone had expected. The budget aims mainly to boost the battered local economy which the Finance Minister explained is beset with new and tough challenges. Like other regional economies, Malaysia is badly affected by tumbling currency and stocks. Some of the key measures to tackle the widening current account deficits include providing various incentives to boost exports, deferring the implementation of mega projects and curbs on the import of heavy equipment. Some major items are summarized below:

  • Higher import duties for all imported vehicles
  • All driving license fees other than for motorcycle license, International Driving Permit and Probationary License be increased to RM50 year
  • Tax rebate of RM400 for purchase of personal computer for each family
  • Import duties on leather products down to 15 percent from between 20 and 30 percent
  • Import duties on a number of consumer durables from 25 to 30 percent
  • Tax relief for parents of children studying abroad withdrawn
  • Increase of fees for international travel documents from between RM145 and RM265 to RM300 and RM600. Meanwhile, restricted passports up from RM60 to RM150
  • Credit ceiling for hire purchase of passenger cars down from 75 to 70 percent

The Malaysian economy is still fundamentally intact over the long-term despite the hiccups due to currency-related problems. The Prime Minister himself has described the budget as a little uncomfortable while the Finance Minister described the budget as a necessary "bitter medicine" before the economy has to undergo a major surgery.

Generally, the budget may not be tough enough to really hit the average Malaysian's wallet. Nevertheless, caution should prevail as things may not be so rosy in the future.

Those who have had it good for so long should brace themselves for rougher times ahead as nothing goes up forever. It does not however suggest that the economy is about to collapse but merely one should be prudent and heed the Prime Minister's advice to be disciplined during economic turbulence.