Budget 2021 highlights: Here’s what Malaysians can expect to get directly ― tax breaks, handouts, subsidies and more - MIDA | Malaysian Investment Development Authority
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Budget 2021 highlights: Here’s what Malaysians can expect to get directly ― tax breaks, handouts, subsidies and more

Budget 2021 highlights: Here’s what Malaysians can expect to get directly ― tax breaks, handouts, subsidies and more

07 Nov 2020

The Budget 2021 tabled in Parliament yesterday has a bit of something for everyone, from appreciation for Covid-19 frontliners, tax reliefs for working adults and aid for job-seekers, to incentives for youths and even ensuring schoolchildren get to drink milk every day.

Here is a quick look at some of the direct benefits. See if any applies to you:

Covid-19 measures

In a year dominated by news on the Covid-19 pandemic along with precautionary rules and SOPs, the Malaysian government has dedicated RM1.8 billion for the Covid-19 fight in 2020, and will be spending another RM1 billion next year including to buy Covid-19 test kits and personal protective equipment for medical frontliners.

If you are among the 100,000 medical workers fighting Covid-19, you will receive a one-off RM500 as a mark of appreciation.

Read here for more on how Malaysians can benefit under the government’s initiatives under Budget 2021 against Covid-19.

With Covid-19 vaccines for Malaysians expected to cost more than RM3 billion, Malaysia’s top four glove manufacturers have agreed to give a combined RM400 million to help with costs such as for the vaccines.

Other quick points on health-related measures are RM25 million for home-based dialysis treatment for kidney patients, RM10 million for cervical cancer screening and mammogram subsidies for women at high risk of having breast cancer, and RM19 million to promote a healthy lifestyle to reduce diabetes, hypertension, and obesity risks.

A very long list of tax reliefs

For the estimated 1.4 million taxpayers earning RM50,001 to RM70,000, the government will reduce their income tax by 1 percentage point.

And for all taxpayers, there are tax reliefs for Malaysians to get vaccinated for influenza and Covid-19 (when available). Also to encourage taxpayers to undergo medical check-ups and lighten the load for those paying medical bills for serious diseases or for their parents’ medical bills.

Tax breaks are given too to encourage Malaysians to save for education and their retirement, and boost spending on sports and reading news online.

The bad news for smokers: cigarettes and tobacco in duty-free zones will now be taxable items; a 10 per cent excise tax will be imposed on electronic and non-electronic cigarettes, including vape from January 2021 with 40 sen as excise tax per mililitre of liquid in electronic cigarettes.

Helping with monthly financial commitments, bills

Next year, the government is dedicating RM28 billion out of the entire RM322.5 billion budget on subsidies. It will be spending RM6.5 billion in cash handouts to 8.1 million people under the rebranded aid programme Bantuan Prihatin Rakyat (BPR) formerly known as Bantuan Rakyat 1Malaysia (BR1M) and also Bantuan Sara Hidup (BSH). This will be up from the previous RM5 billion for 4.3 million individuals under BSH.

Those having trouble repaying their monthly bank loans ― including micro companies taking loans up to RM150,000 and B40 borrowers ― you can opt for a three-month moratorium or to only pay half the amount for six months.

M40 borrowers will find it easier to get the banks’ help in loan repayment as from next month onwards, you only need to declare that your income has been reduced.

To put more cash in Malaysians’ pockets, the Employees’ Provident Fund (EPF) contribution for workers will be cut to 9 per cent (minimum) instead of 11 per cent for one year from next January.

Those made jobless can apply to withdraw RM500 a month from their EPF Account 1 savings or a maximum of RM6,000 spread out over 12 months, starting January 2021.

Malaysians will also be allowed to dip into their EPF Account 2 savings to buy life and critical illnesses insurance for themselves and their families.

Civil servants will get a one-off RM600 aid if they are Grade 56 and below, while a one-off RM300 will be given to government retirees and veterans.

For welfare aid, the government will be spending RM2.2 billion on 400,000 individuals, with increases in payment to various vulnerable categories such as the elderly and the disabled.

Exemptions, rebates, subsidies

Aside from spending RM1.2 billion to provide quality low-cost housing, the government said first-time home buyers will be exempted from stamp duty until December 31, 2025 on their first home up to RM500,000.

Contractors rescuing abandoned housing projects and their original house buyers are exempt from paying stamp duty until December 31, 2025.

Some 140,000 households can expect an e-rebate of RM200 each to buy made-in-Malaysia energy efficient air conditioners or fridges. The government has set aside RM30 million for this.

This is on top of planned government spending in 2021 to support local products, such as RM25 million (including for the Buy Made in Malaysia programme), RM150 million for the Shop Malaysia Online initiative to encourage online spending, RM150 million to train and give equipment to help 100,000 local entrepreneurs shift their businesses online.

Wage subsidies will be extended for three more months, but targeted at sectors such as tourism and retail and capped at RM600 per month for those earning RM4,000 or less. This is part of the government’s measures to keep existing jobs and generate new job.

Employers will also be receiving financial incentives for hiring the disabled, long-term unemployed, and retrenched workers, or for replacing foreign workers in the construction and plantation sector with local workers.

The Social Security Organisation’s (Socso) allowance for Malaysians looking for new jobs after losing their old ones will be extended to nine months. They can expect to get an allowance at 80 per cent of their last monthly salary in the first month, 50 per cent in the second to the sixth month, and 30 per cent for the last three months. Socso’s employment injury scheme benefits will also be extended to 40,000 delivery riders.

Aid for the young and staying connected

The government will spend RM1.5 billion to give eight million persons in the B40 low-income group a RM180 telco credit to cover their internet bills or to help with buying new mobile phones. Telcos will provide matching benefits worth RM1.5 billion such as free internet data.

About 1.5 million youths aged 18 to 20 will be receiving a one-off RM50 in their e-wallet accounts in a push for cashless transactions.

The government will work with Bank Simpanan Nasional for a laptop loan scheme to enable university students who are PTPTN borrowers to carry out online learning, while Yayasan Hasanah will supervise a pilot project where government-linked companies and government-linked investment companies contribute RM150 million to provide laptops to 150,000 students in 500 schools.

Apart from repairing and upgrading school buildings with funds from the Education Ministry’s RM50.4 billion budget next year, RM420 million will be spent to ensure students from low-income families get nutrition with daily milk supply instead of twice a week now.

Besides the RM30 unlimited monthly bus and rail pass under Prasarana to be made available in Kuantan and Penang, there will also be an unlimited monthly travel pass as low as RM5 for children in primary and secondary school and the disabled on Klang Valley Komuter lines, northern sector Komuter, Kuala Lipis and Tumpat inter-city train and Beaufort-Tenom line in Sabah.

The government will also give RM30 million to set up childcare centres in government buildings and hospitals, and a matching grant of up to RM20 million for the private sector to encourage employers to also provide such centres for their staff’s children.

Source: Malay Mail Posted on : 07 November 2020