NSA secretly hacks, intercepts Google, Yahoo daily

The United States’ National Security Agency has secretly broken into the main communications links that connect Yahoo and Google data centers worldwide. That’s according to documents released by former NSA contractor, Edward Snowden, The Washington Post reports.

Video: NSA intercepts Google, Yahoo traffic overseas report | The Nationalhttp://www.thenational.ae/article/2013110
 http://shar.es/IxZIJ



According to the documents, the agency and its British counterpart GCHQ, through a project called MUSCULAR, collected data stored on Google and Yahoo servers. That allowed both governments access to hundreds of millions of user accounts from individuals worldwide.

“From undisclosed interception points, the NSA and GCHQ are copying entire data flows across fiber-optic cables that carry information between the data centers of the Silicon Valley giants,” RT cites the Post’s Barton Gellman and Ashkan Soltani.

A January 9th document says that in the preceding 30 days, collectors had processed over 181 million pieces of information, including both metadata and the actual contents of communications.

The government can already request information from phone or data through the FISA Amendments Act but this data collection would ostensibly take place without Google and Yahoo even being aware of it.

When you send email or store files with an internet company, that data is regularly shared among servers around the world, in order to ensure quick access to your information from wherever you happen to be. Google and Yahoo run customized private networks to shuttle that information around, passing between and within countries, as the Post indicates in a graphic. To move that information, the companies use fiber optic connections, light-speed networks running over thin glass cables. According to the Post, it’s those connections that the NSA is able to monitor. None of Yahoo’s inter-server traffic is encrypted. Not all of Google’s is either.

The MUSCULAR program, according to Wednesday’s leak, involves a process in which the NSA and GCHQ intercept communications overseas, where lax restrictions and oversight allow the agencies access to intelligence with ease.

“NSA documents about the effort refer directly to ‘full take,’ ‘bulk access’ and ‘high volume’ operations on Yahoo and Google networks,” the Post reported. “Such large-scale collection of Internet content would be illegal in the United States, but the operations take place overseas, where the NSA is allowed to presume that anyone using a foreign data link is a foreigner”.

The Post points out that company staffers were surprised and angry to hear that their their networks had been compromised. Google said that it was “troubled by allegations of the government intercepting traffic between our data centers”.

The report comes amid a storm of protest about NSA surveillance both at home and overseas of phone and Internet communications.

On Tuesday, US officials said reports that American spy agencies snooped on millions of Europeans were false.

Alexander told lawmakers that in many cases European spy agencies had turned over phone records and shared them with US intelligence.

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USA Spying, the Super-Snooper !

The United States is running clandestine communications intelligence facilities at its embassies in Kuala Lumpur, Jakarta, Bangkok, Phnom Penh and Yangon.

The country is doing so by tapping telephones and monitoring communications networks from electronic surveillance facilities in US embassies and consulates across east and south-east Asia, according to information disclosed by intelligence whistleblower Edward Snowden.A top secret map dated August 13, 2010 lists nearly a hundred surveillance facilities worldwide, the map however, shows no such facilities are located in Australia, New Zealand, Britain, Japan and Singapore – the US’s closest allies.

Snoopy the Snooper

According to the map published by Germany’s Der Spiegel magazine today, a joint Central Intelligence Agency (CIA) – National Security Agency (NSA) group known as ” Special Collection Service” conducts the sweeping surveillance operation, as well as clandestine operations against specific intelligence targets.The map, which was initially published in full on Der Spiegel‘s website but subsequently replaced with a censored version, lists Special Collection Service facilities at 90 locations worldwide, including 74 manned facilities, 14 remotely operated facilities and two technical support centres.

The map confirms the global reach of US signals intelligence operations with special collection facilities located in most major capitals on every continent.Read the full story here

http://en.harakahdaily.net/index.php/headline/8057-us-embassy-in-kl-and-elsewhere-conducting-clandestine-operations-.html

By Hanin Fadiyah@www.harakahdaily.com

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World Bank ranks Malaysia the world's 6th ease of doing business

KUALA LUMPUR: A World Bank report has ranked Malaysia as the sixth friendliest country in the world to do business, beating developed nations such as South Korea, the United Kingdom and Australia.

In a survey of 189 economies, the “Doing Business Report 2014” saw Malaysia jumping from 12th place last year, and up from 25th when it first joined the survey in 2007.

Countries with high rankings, according to the World Bank website, meant that their respective regulatory environments made it better for local firms to start up and operate.

Business-friendly reforms im­­proved a country’s standing, which Malaysia was noted for.

These included the reducing of company registration fees, which made starting businesses here less costly.

The report said Malaysia also made it easier for people to deal with construction permits by coming up with a one-stop shop. Even getting electricity was a factor.

“Malaysia made getting electricity easier by increasing the efficiency of internal processes at the utility and improving its communication and dialogue with contractors,” it said.

The report included Malaysia as a case study for electronic tax filing and payments.

Despite initial public reluctance, the report said, more people used the e-filing system over time, with businesses aided in the process.

“The time that businesses need to comply with Malaysia’s tax regulations fell from 190 hours in 2004 to 133 hours in 2012,” it said.

The report also found Malaysia ranking highly along specific rankings.

Ranking first in the world, Malaysia tied with Britain for “Getting Credit”, and earned fourth and fifth places for “Protecting Investors” and “Trading Across Borders” respectively.

The report’s findings were welcomed by International Trade and Industry Minister Datuk Seri Mustapha Mohamed, who said the country had aimed to be in the report’s top 10 list by 2015.

“Soon after Prime Minister Datuk Seri Najib Tun Razak assumed office, Malaysia was in 23rd place.

“The rise to sixth place is testament to his stewardship and a result of the economic and government transformation programmes,” Mustapa said in a statement.

He added that the ranking helped to reinforce Malaysia’s position as a preferred destination for trade and investments among local and foreign investors.

Singapore was ranked first in the World Bank’s list followed by Hong Kong, New Zealand, the United States and Denmark.

Contributed  by Patrick Lee The Star/Asia News Network

A Malaysian global ambition realised

PEMUDAH or The Special Task Force to Facilitate Business Malaysia’s ambition to be ranked among the top 10 in the world was realised when Malaysia was ranked 6th in the World Bank Ease of Doing Business Report 2014 (DB 2014), up from 12 in 2013 and 25 in 2007 when Pemudah was established.

Pemudah is a partnership between public and private sectors established in 2007 to improve the ease of doing business in Malaysia and to enhance the nation’s competitiveness.

This achievement is very significant as Malaysia competed with 189 economies to be counted among the best in a race where competition was intense and benchmarks were high.

I would like to share the 6-year journey from 25th to 6th rank in the DB rankings. Pemudah was set up by the then prime minister, Datuk Seri Abdullah Ahmad Badawi mainly to address weaknesses in public service delivery and continuous civil service “bashing” in the media.

He wanted to adopt a fresh approach and saw the value of a joint private-public sector committee in improving public service delivery.

A small group of 23 leaders from both the private and public sectors was appointed to the task force which was co-chaired by the then Chief Secretary to the Government, Tan Sri Mohd Sidek Hassan and me. The vision adopted at the first meeting was to have “a globally benchmarked, customer-centric, innovative and proactive service in support of a vibrant, resilient and competitive economy and society”.

This vision was underpinned by the following values: A sense of urgency, proactive public-private sector collaboration, facilitation, not hampering; no more regulation than necessary; zero tolerance for corruption. We announced our aim was to be among the top 10 most competitive economies globally.

How did Pemudah deliver on the promise? A shared vision, a common multi-agency platform, commitment and clear rules of engagement contributed to delivering the outcomes. Meetings were scheduled at the beginning of the year, fixed on the last Friday of each month, except when parliament was in session when meetings were convened on Tuesdays.

Setting meeting dates early ensured high attendance at meetings where no alternate members were permitted.

The commitment of members was not only confined to the monthly meetings of the task force as Pemudah worked through two main working groups (WG) and more than 10 focus groups (FG) which focused on specific areas.

Each group was chaired either by the public or private sector and reported progress on a monthly basis to the main task force. No allowances of any kind were paid and members contributed voluntarily for the common good.

The WG on Efficiency Issues focused on operational efficiency including licensing, e-payments and immigration-related matters. The WG on Policy Issues deliberated on national competitiveness issues like FIC, liberalisation, education, FTAs, etc.

The FGs covered specific issues like paying taxes, registering property, enforcing contracts, business processes, DBKL to name a few. While membership in Pemudah was confined to appointed members, membership in the WGs and FGs was wider.

To enhance awareness by the business community and citizens, the secretaries-general/heads of ministries/agencies wrote articles in the press and publicised their email addresses to enable direct communications to be direct and instantaneous and the media used to publicise improvements made.

Pemudah was supported by a strong secretariat in the Ministry of Trade and Industry (Miti) that issued minutes of meetings within 48 hours to facilitate quick follow-ups to decisions made.

The key improvements to public service delivery were varied with significant gains registered in many areas. A case in point is the issuance of construction permits, ranked 137th in 2007.

Datuk Arpah Abdul Razak, then director-general of Local Government Department and currently the secretary-general of the Housing and Local Government Ministry, set up one stop centres which allowed concurrent submission of all applications.

The centres then obtained approvals from all technical agencies within a stipulated time-frame. Kuala Lumpur mayor Datuk Seri Ahmad Phesal Talib further streamlined the procedures/timelines.

Timelines for approvals were reduced from 420 days to 100 days while procedures declined from 39 to 10. Malaysia’s rankings in construction permits leapfrogged to 43rd in DB 2014.

Another area of significant improvement registered was Trading Across Borders. Miti secretary-general Datuk Dr Rebecca Fatima Sta Maria chaired a multi-agency FG comprising Customs, Transport Ministry, Finance Ministry and permit issuing agencies to reduce time taken to import and export though pre-clearance of cargo and reducing documentation for such transactions.

The work of this FG improved Malaysia’s rankings from 46th to 5th in the six years.

In streamlining processes to start and close a business, credit is due to former Companies Commission of Malaysia (CCM) chief executive Datuk Abdul Karim Abdul Jalil and his team. Today, you can start a business in one hour compared to three days in 2007. In addition, the introduction of the Malaysian Corporate Identity by the Malaysian Administrative Modernisation and Management Unit has also contributed to Malaysia’s ranking improving from 71st to 16th in 2014.

The ranking will strengthen further with the impending introduction of a new Companies Act by CCM chief executive Mohd Naim Daruwish that will further reduce costs and improve efficiency.

Malaysia’s ranking in Paying Taxes was 49th in 2007, 15th last year and 36th in DB 2014. Several initiatives were implemented by former Inland Revenue Board (IRB) CEO Tan Sri Hasmah Abdullah and current CEO Datuk Dr Mohd Shukor Mahfar to facilitate electronic services, prompt refunds of overpaid taxes and enhance transparency of the tax process.

Hasmah reported that she received more than 500 messages on the day her email was made public and a special mechanism was set up to allow her to reply to each of them. Such was the commitment of this former civil servant.

Businesses used to complain about the backlog of court cases and often commercial contracts included provisions for determining courts to be in Singapore.

Former Chief Justice (CJ) Tun Zaki Tun Azmi and current CJ Tun Ariffin Zakaria were instrumental in motivating their team to clear the backlog. They also took up Pemudah’s proposal for new commercial courts to be established with a client charter of resolving all new commercial cases within a nine-month period – a timeline that is world class by any standards.

The transformation and improved rankings from 81st in 2007 to 30th in DB 2014 was the subject of a special report by the World Bank on Malaysia as a best practice. Rankings will improve further as the focus moves to the enforcement of judgements.

We have experienced the speed of issuance and renewal of passports, due largely to the work of past and present Immigration directors-general, including Tan Sri Mahmood Adam, who subsequently assumed the position of Home Affairs Ministry secretary-general. He also adopted and adapted Pemudah’s point system for evaluating eligibility for permanent residence and made it easier for foreign spouses and expatriates to work here.

When the proposal to disband the FIC was presented to Prime Minister Datuk Seri Najib Tun Razak, he was decisive. The decision has contributed significantly to improving the investment climate for Malaysia.

The 6-year journey of Pemudah is evidence that with the right focus and right commitment by the right parties, our rankings in world benchmarked public services can be even higher. It also indicates the power of public-private sector collaboration as a common and effective platform in moving the Malaysian development agenda forward.

I wish to congratulate all members of the civil service, past and present and to thank my private sector friends who have contributed to the incredible journey of Pemudah.

A special word of thanks to the former chair, Mohd Sidek, for his strong leadership and for throwing the challenge to be top 10 at us – we have done it in partnership with everyone.

I am confident that Chief Secretary to Government Tan Sri Dr Ali Hamsa and the new private sector co-chair, Datuk Saw Choo Boon will be successful in maintaining or improving Malaysia’s ranking with the continued support of the private and public sectors.

- Comment by Tan Sri Yong Poh Kon
Tan Sri Yong Poh Kon stepped down as co-chair of Pemudah in September 2013. He is the current president of the Federation of Malaysian Manufacturers and the managing director of Royal Selangor.

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China demystifying nuclear subs a welcome move

Wide coverage has been given to the Chinese nuclear submarine force in Chinese State media recently, considered to be a showcase of China's strategic master card. China's debut in this field is believed to have deep implication.  

Being confident is of prime importance to achieve military transparency. US submarines are open to visitors, so are parts of the Pentagon. Washington prefers to display power, which will convince the public of the national security while deterring opponents. It obviously believes that core military power being exposed to the public could generate more positive effects, distracting attention from worrying about the "leakage of secrets." 

Chinese understanding of "state secrets" is changing as its military power keeps increasing. On one hand, China is facing a heavier burden of keeping secrets due to soaring external interests on intelligence information about it. On the other hand, it has more room to win strategic gains through actively releasing some information. Is China safe? Are there any external forces daring to risk a strategic showdown with China or radically provoke China over its core interests? Such questions linger on in the minds of the public.

Besides being an economic giant, China is powerful in possessing a ­credible second-strike nuclear ­capability. However, some countries haven't taken this into serious consideration when constituting their China policy, leading to a frivolous attitude ­toward China in public opinion. 

Therefore, partly revealing the Chinese nuclear submarine force is in the interests of China. It could strengthen cohesion of Chinese society and enhance a comprehensive understanding of China. There is necessity that China should summarize its efforts in realizing military transparency and keep on moving forward.

For a modern power, there is rare opportunity to input core military power, which is mainly assuming a deterrent role, into practical war. To build the military we need to ensure its actual combat capacity, as well as convert it into strategic deterrence. Being in a sensitive position in the process of a peaceful rise, China will see a growing demand for strategic deterrence.

The current nuclear capability of China and the world's understanding of it cannot guarantee China's strategic deterrence not to be challenged. The limited number of its nuclear submarines is not enough to quell the idea of damaging China's interest in an extreme way. Jimmy Kimmel's shocking show demonstrates that many people in the West think they can choose to be friendly with China, but they don't have to be.

China needs to make it clear that the only choice is not to challenge China's core interest. To cultivate such thinking, there remains tedious work to do. Developing marine-based nuclear power is part of such work. Perhaps it will give excuse to "China Threat" speculation but the benefit will far eclipse the trouble created by external opinions.

Domestically it is of great significance to open some of the strategic military facilities where the public can have direct access to learn about China's aircraft carrier, missile base or witness a major military exercise. It is a way to help foster people's support for national defense, which is more and more important in modern society.

By Global Times

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China unveils nuke submarine, moving towards military transparency

China’s 1st fleet of nuclear submarine revealed for first time in 42 years CCTV News - CNTV English

http://player.cntv.cn/standard/cntvOutSidePlayer.swf?videoCenterId=8a29d075828644918bbd615daa014703&tai=outSide.english&videoId=20131028102971
http://english.cntv.cn/program/newshour/20131028/102971.shtml

The world has been given a rare glimpse into China's nuclear-powered submarine fleet, with State-owned media carrying extensive coverage of the previously mysterious strategic deterrence force.

The unprecedented revealing of the underwater fleet is a demonstration of China's confidence in its sea-based nuclear strike capability and serves as a deterrent to any attempted provocation amid the changing geopolitical situation, said military observers.

Starting on Sunday, China Central Television carried serial coverage two days in a row on the submarine force of the People's Liberation Army (PLA) Navy's Beihai fleet in its flagship news program Xinwen Lianbo.

The People's Daily, the PLA Daily and the China Youth Daily on Monday all carried front-page stories, features and commentaries on the submarine force, applauding its achievements since the launch of China's first nuclear-powered submarine in December 1970.

According to the reports, the idea of building a nuclear submarine was initiated by Chairman Mao Zedong in the late 1950s to break the global military powers' "nuclear blackmailing and monopoly."

In September 1988, China launched a carrier rocket from a nuclear submarine, becoming the fifth country in the world to have the capability of sea-based nuclear strike.

While striving to improve its strike capability, the submarine force has also maintained a good safety record, with no single nuclear accident reported during the past four decades, said the reports.

The People's Daily on Monday hailed the submarine force as "a shield preserving world peace and stability" and "a cornerstone to safeguard state sovereignty, security and development interests."

Du Wenlong, a military expert, told the Global Times on Monday that the latest publicity shows the maturity in the submarine force's sea-based nuclear strike capability, and implies progress in the development of China's new generation of submarines.

According to military observers, the submarines shown in the CCTV report and newspaper photos are the old models, which were put into service in the 1980s. It is reported that the navy is replacing them with Jin-class submarines, and a newer model, the Tang-class, is reportedly in development.

Du said in comparison to foreign submarines, China occupies a seat within the leading group but lags behind the US and Russia in terms of the submarine's noise output and the number of missiles it can carry.

Li Jie, another military expert, shared similar views, noting Chinese submarines still fall behind US and Russian ones, but have better prospects than French and British ones.

The growing capability of the Chinese submarine force is in line with the global emphasis on sea-based nuclear strike capability.

Sea-based nuclear deterrence is more covert, so it gives the countries the capability to launch a counterstrike after their main nuclear bases are destroyed, Li explained, noting its development requires strong comprehensive scientific and technological capabilities.

In addition to the demonstration of more transparency in the military, Li said the revealing of the force is also a deterrent to foreign provocation.

According to reports, during the submarine force's drills, it has repeatedly been tailed and interrupted by foreign ships and aircraft, including one time in international waters in the West Pacific.

"The changing international situation has caused containment to China's growth. The US-Japan alliance and US pivot to the Asia-Pacific both apparently target China. The publicity of the submarine force is a warning to any country that attempts to provoke China, telling them whoever makes the first strike should think about the consequences," Li said.

CCTV commentary said the submarine force has equipped China with a more covert and reliable nuclear counterstrike capability in addition to its intercontinental ballistic missile and strategic bomber, which would make China's rivals abandon their war attempts for fears of the unbearable price they might have to pay.

- Contributed By Yang Jingjie Global Times

Malaysian Chinese Zombie wins the war !

Malaysian-made game a hit in China, Taiwan and Hong Kong

Scary source: Chan’s popular game is based on the 1980s zombie movies. 

PETALING JAYA: Malaysian zombie fans, forget Walking Dead or the Living Dead. There is a new zombie tale in town – the Chinese Zombie War.

According to its creator, Chan Kam Wai, 29, the zombies in this mobile app game are already part of Asian culture.

“They are based on the 1980s zombie movies we used to get from Hong Kong. Do you remember? Unlike the Western zombies, the Chinese zombies hopped around.

“The culture is familiar to many Asians, so when we came across it in our research for possible game ideas, we decided this was the one,” he said.

The familiarity of the horror genre resonated with many, especially from China and Taiwan, making it one of the most successful mobile apps from Malaysia.

The Chinese Zombie War was launched in May and has since become one of the Top 20 most downloaded apps in China.

“We have had more than 250,000 downloads, some 90% of the downloads are from China, Taiwan and Hong Kong,” said Chan.

Now with a second edition, Chinese Zombie War 2, the app game has generated more than RM60,000 in revenue since its launch on the Apple AppStore. It was also one of the top three most downloaded apps in China for three weeks.

The Chinese Zombie War tells of a rookie Taoist priest, Sung, who meets some Chinese zombies in the jungle. At a loss on how to fight them, he is rescued by a beautiful female ghost who trains him to defeat the living dead.

Said Chan: “Asian culture is rich and diverse, so we decided to tap into it and market it globally. Many Westerners accept Eastern culture like the Samurai, Ninja and Kung Fu culture, so it shows that they are interested in Eastern culture but may not be exposed to what else is available. We also wanted something that we could relate to.”

The Chinese Zombie War was developed under the MSC Malaysia Integrated Content Development Programme (Icon), one of the government initiatives run by the Multimedia Development Corp (MDeC) to drive forward the app developing industry in Malaysia.

Since Icon’s launch in 2008, 307 apps have been developed under the programme while some 1,115 people received basic programming training and over 300 were trained on mobile app developing on the iOS and Android platforms.

Unfortunately, the Chinese Zombie War is more the exception than the rule when it comes to local apps breaking into the global or even regional market.

Despite government initiatives to nurture the local app development industry, to date there are only around 680 active Malaysian app developers and some 600 Malaysian apps in the market.

This is only a fraction of the global market; earlier last week, Apple announced that its iOS App Store now has more than 1.5 million apps, which have been downloaded 60 billion times, while some US$60bil (RM192bil) have been paid out to app developers on its platform. There are an estimated 700,000 apps on the Android platform.

The app market boom is expected to grow, and as research firm Gartner estimated recently, the total number of app downloads worldwide will reach 268 billion by 2017.

MDeC Digital Enablement Division director Wan Murdani Mohamad said that about 80% of apps downloaded in Malaysia now are foreign content.

“Malaysians are overdependent on foreign content, so we need to get more local content out. Our local stories, history and culture make the ideal resource for generating content,” he said.

Once a mobile app is in the market, it is already in the global reach, so Malaysian app developers need not worry about making their content “international”, said Wan Murdani.

“You need to have an original idea to be successful as there are many apps out there. Try to globalise local content. Even Angry Birds started as a local app before it hit big.”

Contributed by Hariati Azizan The Star

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Malaysia's high property taxes may not stop prices going up, sub-sales residential houses likely to soar!

The increase in Real Property Gains Tax (RPGT) will dampen speculation but it is unlikely to stop house prices from escalating and may even lead to a rise, say developers and consultants.

Real Estate and Housing Deve­lopers Association (Rehda) president Datuk Seri Michael K.C. Yam said the drastic increase to 15%-30% from 10%-15% previously would discourage any would-be speculator.
 
“Having said that, I have no strong evidence that speculation was one of the main reasons that pushed up property prices. There were some hot spots but it was definitely not on a nationwide basis,” he told The Star.

Property prices in the sub-sale market, added Yam, could increase if homeowners decided to defer selling to avoid the new tax rates.

The sub-sale market, he said, comprised 70% of residential transactions and a decrease in market supply would be inevitable if homeowners delayed selling.

“This means buyers will move to the new properties market and further increase the demand-supply imbalance there. So, a possible side effect is that it could even move prices higher,” he said.

The flat rate of 30% RPGT for six years on foreign-owned properties, said Yam, would also hurt developers during their promotions abroad.

CH Williams Talhar & Wong Sdn Bhd managing director Foo Gee Jen said the doubling of RPGT to 30% would lessen or stop speculation but that in the long-term, this would only make the market more manageable instead of stopping prices from going up.

However, he said limiting foreigners to buying properties worth RM1mil and above should only be applied to major cities like Kuala Lumpur, Johor and Penang.

Khong & Jaafar Sdn Bhd managing director Elvin Fernandez said increasing the RPGT at this stage would also arrest undue price hikes, which was usual before the implementation of Goods and Services Tax scheduled for April 2015.

Deloitte Malaysia RPGT leader Tham Lih Jiun said property price escalation was due to other factors besides speculation, including rises in construction cost and building materials as well as land scarcity.

However, Johor Rehda branch chairman Koh Moo Hing said the increase in the ceiling price for foreigners was expected to have a “negative impact” on the state’s property market, calling it “not good news” for Iskandar Malaysia.

 Value of sub-sales residential properties likely to soar

THE market value of sub-sales residential properties is expected to increase in Penang this year.

ERA Malaysia president Dr Lee Ville said this was because there was still a gap between sub-sales pricing and pricing of properties in the primary market.

“For example, the price for a sub-sales condominium in Gurney Drive area is 20% to 30% lower than that of new properties in the neighbourhood.

“Therefore, there is still room for sub-sales pricing to increase,” he said.

Dr Lee added that the sales of most ERA associate members were registered in the sub-sales segment.

He said there was a need in Penang for more properties with 1,300sq ft to 1,400sq ft in built-up area, priced at around RM400 per sq ft.

Dr Lee spoke at ERA’s Malaysia 2013 Business Conference & Gala Dinner held at Flamingo Hotel in Penang recently.

Also present was ERA Malaysia managing director Christopher Lim.

Dr Lee said the demand for properties in Penang had not softened.

“It appears to be so because bank loans are more difficult to secure these days. Some one-third of the housing loans get rejected, affecting the transactions of properties in 2012,” he said.

On the 2014 budget, Dr Lee said ERA hoped the Federal Government would leave the real property gain tax (RPGT) alone.

Meanwhile, Lim said there was no overbuilding of residential properties in Kuala Lumpur.

“There is still a strong demand for properties priced between RM600,000 and RM1.2mil.

“The population in the Greater Kuala Lumpur area, presently standing at about six million, is growing. It is expected to reach 10 million by 2020, so there is a need for more housing,” Lim said.

Sources: The Star/Asia News Network

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Malaysia Tax Budget 2014 Updates

Malaysia's government moved to allay concerns over its fast-rising debt on Friday, announcing a new consumption tax at a surprisingly high rate, abolishing subsidies on sugar and hiking property taxes to dampen a surge in home prices.

Prime Minister Najib Razak, in his annual budget speech to parliament, announced his government would bring in a goods and services tax (GST) in 2015 at a rate of 6 percent, above market expectations of 4 or 5 percent.

The ringgit currency gained against the dollar in late trade as investors welcomed the tax, which is aimed at broadening the revenue base in a country where only about 10 percent of citizens pay income tax and most of the government's money comes from oil and gas.

Otherwise, Najib announced few major steps to cut subsidies that take up about a fifth of government spending, or deeper reforms such as reducing a bloated, but politically influential, civil service.

Once a high-flying "tiger" economy, Malaysia has become heavily dependent on commodity exports and struggled with low private investment since the 1997-98 Asian financial crisis, despite a partial revival in recent years.

"The government has decided to implement a fair and comprehensive tax system that benefits all Malaysians," Najib said. "The government believes that this is the best time to implement GST as the inflation rate is low and contained."

Najib was under pressure to take bold steps after Fitch ratings agency in July cut its outlook on Malaysia's sovereign debt to negative, citing poor prospects for reform following a divisive May election.

Malaysian markets suffered a bout of turmoil over the summer as the country's shrinking current account surplus left it vulnerable to fund outflows driven by an expected tightening of U.S. monetary policy.

Most economists said Najib's budget had gone some way to restoring confidence in the government's political will to improve its finances, which has been shaken by a rapid rise in debt in recent years.

"The fact that they took the bold step to introduce 6 percent at the start shows a lot of commitment in reining in the fiscal deficit," said Irvin Seah, DBS economist in Singapore.

"You won't see the full benefit of the GST on the fiscal position at the outset... But in the longer term it will help bolster the fiscal position."

Najib announced a raft of steps to offset the impact of the GST, including exemptions on basic food items and transport and one-off payments to poorer families. He also announced a cut in corporate tax of 1 percent to take effect in 2016.

Ratings agency Standard & Poor's called the budget "a step in the right direction" though it added that the budget proposals did not fully address the weaknesses of high subsidies and poor revenue structure.

"We would have preferred more clarity on say fuel subsidies such as details and timelines," said Selena Ling, head of treasury research at Overseas-Chinese Banking Corp in Singapore.

After securing his power base last weekend in ruling party elections, Najib had appeared to have a freer hand to tackle a high fiscal deficit with unpopular steps.

But having trimmed fuel subsidies by 3.3 billion ringgit ($1 billion) per year shortly the Fitch announcement, Najib only pledged to gradually restructure the subsidy policy.

COOLING PROPERTY BOOM

The government's economic report, released just ahead of the budget speech, said that spending on subsidies, including fuel, would total 39.4 billion ringgit next year, down from 46.7 billion ringgit in 2013.

The abolition of the 0.34 ringgit per kg subsidy on sugar was justified as needed to combat rising rate of diabetes.

In the report, the government maintained its commitment to steadily cut the budget gap, from 4.5 percent in 2012 to 4.0 percent in 2013 and 3.5 percent in 2014.

"We believe that the government has paid heed to increasing criticism by markets and rating agencies, and has followed through after the aggressive fuel subsidy reduction in September," Barclays Capital economists wrote in a note.

The economic report forecast a slight pick-up in GDP growth to 5.0-5.5 percent in 2014 from 4.5-5.0 percent in 2013, underpinned by strong domestic demand. The government expects to narrowly stay within its self-imposed debt limit of 55 percent of GDP next year, forecasting a ratio of 54.7 percent.

To cool a surging property market, Najib announced that the country's property gains tax would be doubled to 30 percent for real estate sold within three years. The minimum value of a property for foreign buyers was doubled to 1 million ringgit.

Malaysian property prices have risen by about a third in the past three years, with even bigger rises in hot spots such as parts of southern Johor state.

The government forecast private investment would rise to 17.9 percent of GDP in 2014, with funds going into oil and gas, textiles, transport equipment and real estate development.

Private investment remains well below levels seen in the 1990s, when it averaged 22.9 percent of GDP annually, but it is recovering from an average of 11.8 percent between 2001-2011.

Following are highlights from Najib's ongoing speech to parliament:

CIVIL SERVICE

* Pensioners will receive a special financial assistance of 250 ringgit to assist them meet the rising cost of living. * Government to give a half-month bonus for 2013 with a minimum payment of RM500 to be paid in early January 2014.

CASH HANDOUTS
* Cash handouts to households with a monthly income of below 3,000 ringgit will be increased to 650 ringgit from 500 ringgit.
* For individuals aged 21 and above and with a monthly income not exceeding 2,000 ringgit, cash handouts will be increased to 300 ringgit from 250 ringgit.
* For the first time, cash assistance of 450 ringgit will be extended to households with a monthly income of between 3,000-4,000 ringgit. rising cost of living borne by the lower middle-income group.
* To implement all cash schemes, government will allocate 4.6 billion ringgit which is expected to benefit 7.9 million recipients.

REAL PROPERTY GAINS TAX
* For gains on properties disposed within the holding period of up to 3 years, RPGT rate is increased to 30 percent.
* For disposals within the holding period up to 4 and 5 years, the rates are increased to 20 percent and 15 percent, respectively. Malaysian property firms with exposure to this tax change include UEM Sunrise, Mah Sing Group and Tropicana Corp .
* Raise the minimum price of property that can be purchased by foreigners to 1 million ringgit from 500,000 ringgit.
* Prohibit developers from implementing projects that have features of Developer Interest Bearing Scheme (DIBS), to prevent developers from incorporating interest rates on loans in house prices during the construction period.
* Financial institutions are prohibited from providing final funding for projects involved in the DIBS scheme. Malaysia's top three banks are Maybank, CIMB and Public Bank.

AFFORDABLE HOMES
* To further increase access to home ownership at affordable prices, an estimated 223,000 units of new houses will be built by the government and the private sector in 2014.
* Companies that specialise in affordable housing development include Hua Yang Bhd.
* Government to allocate 578 million ringgit to the National Housing Department (JPN) for low cost flats consisting of 16,473 housing units.
* Malaysian's government to provide 80,000 housing units with an allocation of 1 billion ringgit under affordable housing scheme. The sales price of the houses will be 20 percent lower than market prices.
* Introduce the Private Affordable Ownership Housing Scheme (MyHome) to encourage the private sector to build more low and medium-cost houses. The scheme provides a subsidy of 30,000 ringgit to the private developers for each unit built.
* Preference will be given to developers who build low and medium-cost houses in areas with high demand and limited to 10,000 units in 2014.
* The scheme is for housing projects approved effective from 1 January 2014 with an allocation of 300 million ringgit.

TAX RELIEF
* Government proposes a special tax relief of 2,000 ringgit be given to tax payers with a monthly income up to 8,000 ringgit received in 2013.

GOODS AND SALES TAX
* To implement goods and services tax (GST) on April 1, 2015 - 17 months from now.
* GST rate fixed at six percent, the lowest among ASEAN countries.
* GST replaces current sales tax.
* Basic food items, transportation services, highway tolls, water and first 200 units of electricity for domestic users per month to be exempt from GST.
* Sale, purchase and rental of residential properties as well as selected financial services are exempted from GST.
* PM Najib: "The reality is that inflation now is low at around 2 percent. The government is confident this will be the best time to impose GST as inflation is minimal and under control."
* Training grant of 100 million ringgit will be provided to businesses that send their employees for GST training in 2013 and 2014.
* Financial assistance amounting to 150 million ringgit will be provided to small and medium enterprises for the purchase of accounting software in 2014 and 2015.

CORPORATE TAX
* corporate income tax rate be reduced by 1 percentage from 25 percent to 24 percent.
* income tax rate for small and medium companies will be reduced by 1 percentage point from 20 percent to 19 percent from the year of assessment 2016.

INCOME TAX
* government to give one-off cash assistance of 300 ringgit to low income households
* personal income tax rates be reduced by 1 to 3 percentage points for all tax payers.
* individual income tax structure will be reviewed
* chargeable income subject to the maximum rate will be increased from exceeding 100,000 ringgit to exceeding 400,000 ringgit.
* Current maximum tax rate at 26 percent to be reduced to 24 percent
* measures to be effective in 2015

SUBSIDIES
* Subsidy programme to be "gradually restructured"
* A portion of savings from restructuring to be distributed in the form of direct cash assistance with the other half to finance development projects.
* To abolish the sugar subsidy of 34 sen effective October 26 2013.

IMPROVING BUDGET MANAGEMENT
* committed to reducing the fiscal deficit gradually, with the aim of achieving a balanced budget by 2020.
* to ensure federal debt level will remain low and not exceed 55 percent of GDP.
* government to conduct audits on projects valued at more than 100 million ringgit during its implementation.

ISLAMIC FINANCE
- Securities Commission to introduce the a framework for Social Responsible Investment (SRI) Sukuk, or Islamic bonds, to finance "sustainable and responsible" investment initiatives.

AGRICULTURE
- Government to allocate six billion ringgit allocated for agriculture programmes.
* Says to 243 million ringgit allocated for rubber, palm oil and cocoa replanting as well as forest plantation programmes. Main plantation companies in Malaysia include Sime Darby , IOI Corp and KL Kepong.

LOGISTICS
- Government to allocate 3 billion ringgit in soft loans under the Maritime Development Fund through Bank Pembangunan Malaysia.
* The fund is to provide financing to encourage the development of the shipping industry, shipyard construction, oil and gas as well as maritime-related support activities.

AVIATION
- To replace existing air traffic control and management system in Subang, a new air traffic management centre costing 700 million ringgit will be built at Kuala Lumpur International Airport (KLIA).
* Kota Kinabalu, Sandakan, Miri, Sibu and Mukah airports in Sabah and Sarawak to be upgraded with 312 million ringgit allocation.
- Malaysia Airports manages and operates all airports across the country except for one in Johor.

PUBLIC INVESTMENTS
* Public investments to reach 106 billion ringgit. Projects to be implemented include:
- A 316-kilometre West Coast Expressway. Locally listed Kumpulan Europlus Bhd owns 80 percent of the project, while IJM Corp owns the balance 20 percent.
- Double-tracking rail project along west coast Malaysia. The project is carried out by as a joint venture between MMC Corp and Gamuda.
- Various projects from state oil firm Petronas under its 300 billion ringgit capex programme, including a petrochemicals plant in southern Johor state.

INTERNET ACCESS
- To carry out second phase of high-speed broadband project with the private sector involving 1.8 billion ringgit investment. State-linked telco Telekom Malaysia Bhd is involved in the project.
- To increase Internet coverage in rural areas, 1,000 telecommunication transmission towers will be built in the next three years, with an investment of 1.5 billion ringgit.
- To increase Internet access in Sabah and Sarawak, new underwater cables will be laid within three years at a cost of 850 million ringgit.



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