New form of BR1M to be introduced, says sec-gen

  • Nation
  • Tuesday, 14 Oct 2014

Good news: Some of the measures announced in Budget 2015 have brought welcome relief to Malaysians. Among the measures included tax breaks for about 300,000 individual taxpayers and higher BR1M payout.

KUALA LUMPUR: A new form of Bantuan Rakyat 1Malaysia (BR1M) will be introduced in the future, possibly in the form of food stamps or recipients using MyKad to purchase groceries and household items.

This was so that the aid could be distributed evenly throughout the year, said Finance Ministry secretary-general Tan Sri Mohd Irwan Serigar Abdullah.

He said the Government was studying a new mechanism to replace the way BR1M handouts was doled out to ensure it was more targeted towards groups that needed aid.

Expressing hope that it could be implemented for Budget 2016, he said the mechanism could involve the use of the MyKad to purchase groceries and household items.

He said it could also be in the form of food stamps like how it was given out in the United States.

“It’s a new form of BR1M. For example, let’s say the Government gives out RM100 per month, averaging it out yearly for 12 months, so people can buy essential goods and items. This is the kind of system we are looking into,” he said after a Post-Budget 2015 dialogue yesterday.

Addressing criticisms about the BR1M, he said that it was a means to reduce the burden of the lower income groups.

“In Malaysia, we give both the fishing rod and the fish. (While they are learning), in the meantime, to sustain them, we give the fish,” he said, referring to the proverb “give a man a fish, and you feed him for a day. Teach a man to fish and you feed him for a lifetime”.

On the Goods and Services Tax (GST), Mohd Irwan reminded companies that it would benefit them to quickly register with the Customs Department so they could claim back input tax.

He also explained why the Government was against implementing the Capital Gains Tax (CGT) instead of the GST, which will be imposed at a 6% rate.

As Malaysia was still a developing country, he said introducing CGT would be negative for the country as it would not be attractive to foreign investors.

Currently, Mohd Irwan said only one form of CGT was present and this was the Real Property Gains Tax (RPGT), which was imposed to curb speculative activities in the property market.

“We are only earning RM600mil from the RPGT. This is a very small revenue and is not sustainable. Maybe in the future when we reach developed nation status and our incomes are stable, we can consider the CGT. Not now,” he said.

On the fuel subsidy, he said the current system was not targeted to assist the poor but had benefited everyone, including those who owned several motor vehicles.

“In the long run, we are looking at a targeted mechanism which is still at the design stage,” he said.

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