Koon Yew Yin's Blog
Budget 2022 is killing investors - Koon Yew Yin
Koon Yew Yin
Publish date: Sun, 07 Nov 2021, 09:34 PM
Koon Yew Yin
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An official blog in i3investor to publish sharing by Mr. Koon Yew Yin.
All materials published here are prepared by Mr. Koon Yew Yin
All materials published here are prepared by Mr. Koon Yew Yin
Since the Government is asking for feedback on our ministries, I would like to offer my comment and I trust the Government will take appropriate action.
On last Monday, the first day after the Budget 2022 announcement, Bursa Malaysia took a beating. The FBM KLCI, which is a gauge of the 30 biggest companies on Bursa Malaysia, dipped by 2.2%. RM34bil of market capitalisation was wiped off from the stock market, 178 stocks went up, 996 stocks dropped with 327 unchanged.
The following are the highlights of Budget 2022 themed "Keluarga Malaysia, Makmur Sejahtera (A Prosperous Malaysian Family)" which was presented by Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz in Parliament today.
The government has allocated a total of RM332.1 billion for Budget 2022, the highest value compared to previous budgets. Government revenue is expected to increase to RM234 billion in 2022.
A total of RM233.5 billion is allocated for operating expenditure, RM75.6 billion for development expenditure and RM23 billion under the COVID-19 Fund.
Rm 233.5 billion operating expenditure is too much in comparison with our population and the development expenditure.
Civil servants in Malaysia:
I just Googles “number of civil servants in Malaysia” and found this: The number of civil servants as of March this year stands at a whopping 1.71 million, said Chief Secretary to the Government Datuk Seri Dr Ismail Bakar.
For the core service sectors, he said, the armed forces comprised 152,957 personnel; police had 128,536; civil servants of various schemes (665,068); education (523,226) and health (240,745).
Our population is 32 million and we have 1.71 million civil servants, every 19 citizens to 1 civil servant. Almost all the civil servants are Malays.
I just Googled “How many civil servants are there in the UK?” and I found the following.
The Civil Service headcount increased by 10,930 in the year to March 2020 and stands at 456,410. On a full-time equivalent (FTE) basis Civil Service employment stands at 423,770. FTE takes into account part-time workers. In 2020 just under a quarter of civil servants worked part-time (22.9%).
UK population is 67.2 million people. In UK 1 civil servant for 147 citizens. While in Malaysia 1 civil servant for 19 citizens.
Moreover, Malaysia must be the only country in the world where the National Budget is race -specific. According to official estimates, Budget 2022‘s allocation for Bumiputera community comes up to Rm 11.4 billion, while the amount for non-Bumiputera community is about Rm 300 million or 2.6% equivalent. This works out to about Rm 577 per Bumiputera and Rm 75 per Indian and Rm 15 per Chinese.
The government also proposed a one-off windfall tax called Cukai Makmur, and higher stamp duty for stock trading on Bursa Malaysia, to raise its revenue.
Under the Cukai Makmur, companies that churn more than RM100mil in annual income will be taxed 33% in 2022, from the current 24% tax rate.
In addition, the government will remove the RM200 stamp duty cap and increase the stamp duty rate to 0.15% from 0.1% for stock trading.
This Cukai Makmur is definitely not good for all investors including day traders, long term ordinary investors, institutional and foreign investors.
Negative growth for corporate earnings in 2022.
Several research houses have cut their forecasts on corporate earnings and the FBM KLCI performance.
“The biggest surprise for us in Budget 2022 was the introduction of the one-off special windfall tax,” says CGS-CIMB Research head of Malaysia research, Ivy Ng, in a report.
I trust the Government will consider my comment seriously and take appropriate action.
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Discussions
2 people like this. Showing 32 of 32 comments
When it is raining at least look at the brighter side
There is a rainbow after all
With all the extra taxes Palm oil will be doing extremely well
2021-11-08 10:10
Our Taxation system is Heading for an Economic Disaster.
By Richard De Lon
Instead of implementing windfall tax, inheritance tax, RGPT tax, SST, Tax GST tax and a host of other minor taxes in order to fill up the depleting nation's coffers, its about time our govt start imposing tax on all Malaysians irrespective of race.
The present system of taxing only non-malays while the majority malays only pay Zakat is a non sustainable policy in the long run, Presently, 35% of non malays is legally compulsory to pay income tax while 65% of malays can opt to pay zakat to their islamic religious bodies. In other words, 35% tax collected from the non malays are used exclusively for the govt expenses and the developmental expenditure while those paying zakat are exclusively used by the religious bodies for their islamic affairs. On top of this , sizeable annual allocation is given to the islamic bodies from the money collected from the taxes collected from the 35% non malays.
As more and more non malays opt to migrate and the percentage of tax payer shrink how long can the govt rely merely on the tax paid by 35% non malays? This is further compounded by the fact the malay population is expected to increase to 70% in the next few years and a sizeable number of them will be employed in the civil service. This effect will only increase the govt expenditure annually and with a shrinking tax base, how and where would the govt hope to obtain its revenue. ?
To continue to impose tax on company profits via windfall and other such taxes is akin to killing the goose that lay the golden eggs. The more such tax you impose the more disincentive it is for companies to invest in the country as we become less competitive compared to new venues like Vietnam and Phillipines.
Changing the tax pattern where malays have to pay income tax rather than zakat will indeed be a monumental decision for any govt to make but not making that difficult decision is not an option if our country does not wish to face economic disaster.
2021-11-08 10:46
What shared by Sslee is true. Too bad such change will not happen till I die.
2021-11-08 11:28
Non stop politicking is also killing this country. Our politicians spend more time playing politics than doing constructive works. Only good at barking in the parliament. Bring back the GST is the best solution to achieve an equitable tax system. Most of the countries in the world have GST/VAT, I am sure they know what works.
2021-11-08 11:32
penulis kena jujur bila menulis, sebab kakitangan awam di uk
cuba lihat ini.
Public sector employment, UK: June 2021
There were an estimated 5.68 million employees in the public sector for June 2021, an increase of 131,000 (2.4%) compared with June 2020.
2021-11-08 12:10
Raider ask lah this to improve the govt budget loh ??
Govt can Save some money on low lying fruits loh:
1. What the fuuck extension new car sales extension ? Just tax them normal...why do u need so many new cars around & consume more petrol subsidies & affect the environment leh ? We are recovery mode mah, just impose the sales tax & we can raise Rm 3b mah!
2. Why so huge petrol subsidy leh ? Our country has the cheapest petrol in the world and give very high subsidy loh? Just raise the petrol price by 30 sen for Ron 95 and Diesel pump loh! This will help us to save Rm 6b a year yet we still have one of the cheapest Petrol in the world at Ron 95 at Rm 2.38 per litre mah!
3. What the Fuuck exemption of Property RPGT at year 6 leh ? Give full exemption only at year 12 lah....Scale up the exemption slowly base on % like 6 to 8 yrs, 9 to 10 yrs and 11 to 12 yrs lah ? Property are mean for long term investment & not for trade & speculation mah! That will save Rm 3b loh!
4. Grant lah....long term oversea...residence for well to do retiree give lah 300k immigration for immediately and subsequent 100k every year that will raise rm 7b pa loh! Beside creating more jobs loh!
5 Grant lah...300k new foreign worker permits for plantation, industries and service industry assuming Rm 6k per permit that will raise Rm 1.8b.
Besides savings for the industry and palmoil plantation will raise another Rm 5.2b from reduction of waste of palmoil fruits and expansion of industry sector mah!
6. Oversea travel tax or oversea exit tax....whoever wants to travel overseas will be tax Rm 150 per person for flights or ships and Rm 20 for land crossing per person loh! That will raise Rm 3b pa loh!
7. Reduce the subsidy for university by 20% get them to recruit more paying students that will raise Rm 1b pa loh!
The above just chinchai...Raider already raise Rm 30b pa without affecting the current economic condition loh!
2021-11-08 12:25
Others...like Hongkong...Msia Govt should start yearly disposal of land thru govt auction of land and tenders to raise Rm 30b pa loh!
2021-11-08 12:27
Just Sailang ALL INTo Insas and WC
then MIGRATE to Australia.
MUAHAHAHAHAHAHHAHAHAH !!
2021-11-08 12:29
This advice for indiviual investor not for the Govt mah!
Posted by leno > Nov 8, 2021 12:29 PM | Report Abuse
Just Sailang ALL INTo Insas and WC
then MIGRATE to Australia.
MUAHAHAHAHAHAHHAHAHAH !!
2021-11-08 12:32
This govt still can take advise ?
HAHAHAHAHAHAHAHAHAH
BOH CHOW CCCCCCCCCC AAAAAAAAAAAAAA !!
2021-11-08 12:34
Changing the taxation system is a political suicide. Whoever does that, say bye bye to his/her govt post. lol
2021-11-08 12:57
trusting the gomen to take appropriate action is on par with trusting KYY stock recommendations
2021-11-08 14:43
The problem with Malaysia is that we always move backwards. If we do not enlarge the cake, it will not be sustainable.
2021-11-08 18:51
"I just Googles “number of civil servants in Malaysia” and found this: The number of civil servants as of March this year stands at a whopping 1.71 million,"
============================================================
Let's do a simple math.
Assume all civil servants are paid minimum wage of RM 1500 per month excluding benefits.
So, 1.71m x RM 1500 = RM 2,565,000,000 (~ RM 2.55 Billion) spent every month to keep the civil service machinery running.
Therefore in a year, RM 2.55 x 12 months = ~~ RM 31 billion. Mind you, it is just bare minimum with assumption that everyone earns RM 1500. The reality is different, which could double it up to RM 62 billion with all benefits and other salary scales
included.
It's mind boggling expenditure.
2021-11-08 20:59
Civil servants are the votes bank for every Malay based party, used to be UMNO votes bank. Whoever gets their votes will be the government. It is politics. Civil servants are treated well by the government of the day, they get full salary during MCO locked down and many other goodies. How long can it last? It has been going on since Merdeka and off course until oil wells run out.
DickyMe "I just Googles “number of civil servants in Malaysia” and found this: The number of civil servants as of March this year stands at a whopping 1.71 million,"
============================================================
Let's do a simple math.
Assume all civil servants are paid minimum wage of RM 1500 per month excluding benefits.
So, 1.71m x RM 1500 = RM 2,565,000,000 (~ RM 2.55 Billion) spent every month to keep the civil service machinery running.
Therefore in a year, RM 2.55 x 12 months = ~~ RM 31 billion. Mind you, it is just bare minimum with assumption that everyone earns RM 1500. The reality is different, which could double it up to RM 62 billion with all benefits and other salary scales
included.
It's mind boggling expenditure.
08/11/2021 8:59 PM
2021-11-08 21:14
Big fishes will sell everything before 2022. Next year only ikan bilis swimming in the Bursa market
2021-11-08 23:09
Really fortunate...Keyman188 had managed to pare down 40% shareholding of overall long term position since 2nd half of Sept until before budgetary announcement...
Since that unexpected "Cukai Makmur" + "50% increased of stamp duty"...Keyman188 further pare down another 10% long term position...
Now waiting this 2 months (before year end) further pare down until 30% long term position if share price slightly recover back certain level since Keyman188 managed to strike cheapest entry price last year during pandemic...
Keyman188 diverted investment funds to "other market"...
Be frankly speaking...
Keyman188 really not so favourable the latest 2022 Budgetary...
Unexpected GOM will implement "Cukai Makmur" for those RM 100 mil above...
Unexpected GOM will remove stamp duty capping by RM 200 & increase the duty by 50% from 0.10% to 0.15%...
Since "Cukai Makmur" already tabled at Parliament...you think upcoming year by year will continue !!! (We don't know but high possibility since Natioanal debt now stood at RM 1.25 trillion pre-budgetary announcement)...
Furthermore...current local equities valuation really not so attractive if comparing other market peers...
Beside valuation...other "factors" also not so favourable since slowly slowly emerged on the table...
~~~~~~~~~~~~~~Always remember, plenty of choice~~~~~~~~~~~~~~~~
2021-11-09 08:26
OMG...market further vomiting...
See you 13xx by next year...
wkwkwk...kekeke...hehehe...
2021-11-09 09:52
Next month more selling pressure before closing 2021...
No more window stressing for this year...
In fact worse performance than 2020 during pandemic if you measure the "real market & individual performance"...
Amboi....
2021-11-09 10:08
Many filthy rich bring their money overseas and come
back to Malaysia to complain. Why not you make sarawak
beautiful. Don't be selfish
2021-11-10 10:06
Malaysia's GDP likely contracted in 3Q on renewed Covid-19 curbs
(November 11, 2021 10:15 am +08)
BENGALURU (Nov 11): Malaysia's battered economy likely slipped back into contraction in the third quarter as coronavirus-induced restrictions brought economic activity to a near-standstill, a Reuters poll found.
After bouncing back from its worst recession in more than two decades in the second quarter, the Southeast Asian economy shrank 1.3% in July-September from a year earlier, according to the median forecast of 20 economists in the poll.
Forecasts for the change in gross domestic product (GDP), due to be released on Nov. 12, ranged from -6.0% to +1.0%, underscoring widespread uncertainty around the economic impact of the COVID-19 pandemic.
"The deceleration reflected strict movement restrictions to curb the more contagious Delta variant virus infections," said Chua Han Teng, an economist at DBS Group Research. "With much of the economy under harsh curbs, private consumption, investment, and manufacturing activities took a big hit."
Renewed COVID-19 lockdowns in the Southeast Asian country dampened a nascent economic recovery, pushing Malaysia's central bank to slash its 2021 growth forecast to 3.0%-4.0% from 6.0%-7.5% previously.
After chopping its benchmark rate by 125 basis points last year as the pandemic took hold the central bank was expected to keep rates unchanged until the third quarter of next year, a separate Reuters poll showed.
But the economy is expected to gain momentum, expanding 4.0% in the current three-month period as a ramped-up vaccination drive, a record government budget to spur post-pandemic recovery and gradual reopening have boosted hopes of a turnaround.
The government expects Malaysia's economy to grow 5.5%-6.5% next year, driven by normalisation of economic activity, resumption of projects, higher commodity prices and strong external demand.
"We expect a strong recovery in the coming quarters as restrictions are eased further and normal economic life returns. This will also be supported by loose fiscal policy, with the recent 2022 budget targeting another ramp up in spending," said Alex Holmes, emerging Asia economist at Capital Economics.
"With vaccine coverage now among the best in the world, virus cases falling back sharply and the government easing restrictions, activity is rebounding strongly."
But several economists warned the bleaker outlook for China's export market and continued pandemic fears pose downside risks to growth. China is Malaysia's largest trading partner.
## https://www.theedgemarkets.com/article/malaysias-gdp-likely-contracted-3q-renewed-covid19-curbs
2021-11-11 12:33
Amboi...market NO way out if this upcoming GDP announcement is turn to negative news...
Well prepare for perfect storm again...
2021-11-11 12:34
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2021-11-08 09:38