May 22, 2018 / 3:07 AM / in 3 months

Factbox: Malaysia's new government promises reforms

KUALA LUMPUR (Reuters) - Ministers in Malaysia’s new government began their first day at work on Tuesday, having promised a slew of economic and financial reforms in the lead up to a stunning election win over an alliance that had led the country for the six decades since independence.

Malaysia's Prime Minister Mahathir Mohamad is seen on video conference screen during the Wall Street Journal CEO Conference in Tokyo, Japan May 15, 2018. REUTERS/Toru Hanai

Prime Minister Mahathir Mohamad’s government has vowed to fulfill some of those promises in its first 100 days.

Here are the key points from the manifesto:

IN 100 DAYS

- Abolish the goods and services tax (GST) and replace it with sales and service tax (SST). In his first week in office, Mahathir announced that GST would be zero-rated from June 1.

- Stabilize oil prices and reintroduce targeted petrol subsidies.

- Erase unjustified debts forced onto oil palm settlers at state agency Felda.

- Introduce Employee Provident Fund contribution schemes for housewives.

- Equalize the minimum wage to 1,500 Malaysian ringgit ($378) a month for the whole country, and to review the rate every two years. To reduce cost pressure on employers, the government will bear half the cost of raising salaries.

- Delay loan repayments for all National Higher Education Fund Corporation borrowers earning less than 4,000 ringgit a month.

- Form a Royal Commission of Inquiry to look into institutions like state-fund 1MDB, palm oil plantation agency Felda, government agency MARA and pilgrimage fund Tabung Haji, and reorganize their leadership structures.

- Introduce a healthcare scheme to allocate 500 ringgit a year for the low income group to receive basic healthcare in registered private clinics.

- Launch detailed study on mega projects awarded to foreign countries.

OTHER TAX, DUTIES AND SUBSIDIES

- Reduce excise duty on imported cars for first time car owners, but limited to one car per household.

- Abolish toll collections in stages.

- Review tax systems to make income and corporate tax rates competitive compared with other ASEAN countries. Tax rates for companies, small businesses and part time workers will also be reviewed.

CORPORATE REFORMS

- Government linked companies will operate in sectors that face market failure, instead of competing with private companies.

- Reexamine company monopolies to make sure goods and services are fairly priced.

- Set a time limit for property developers to finish housing projects.

- Introduce an act to prevent the government from using citizen’s money saved in government linked funds for expenditure purposes.

- Revamp the National Trust Fund Act — a fixed percentage of state oil and gas firm Petronas’ profits, at a minimum of 10 billion ringgit a year, and profits of other government linked companies to be channeled into the fund.

- Increase petroleum royalties to East Malaysian states Sabah and Sarawak, and other petroleum producing states, to 20 percent. Examine the rights of Sabah and Sarawak over their national resources and oil and gas reserves.

RINGGIT

- Tasking the central bank to restore the value of the ringgit currency to its full potential within three years.

LABOUR

- Reduce the number of foreign workers from 6 million to 4 million; will validate the status of UNHCR card holders as refugees to allow them to work in Malaysia and reduce the country’s dependency on foreign workers.

($1 = 3.9690 ringgit)

Reporting by Emily Chow; Editing by Simon Cameron-Moore

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