Malaysia Budget 2021 Highlights
The Malaysia Budget 2021 had been tabled by our Finance Minister, Tengku Zafrul Aziz on 7 Nov 2020, and we have some goodies which we should grab if we are eligible. To make that easier for everyone, here are the highlights of the Budget 2021.
Let us start with the tax benefits for individuals, and the goodies next.
1. Tax relief increased to RM8,000 for parents’ medical, special needs and care expenses.
2. Maximum tax relief for individual, spouse and children’s medical expenses for serious medical ailments raised to RM8,000.
3. Personal income tax is reduced by 1% for those earning RM50,001 -RM70,000.
4. Individual income tax relief of up to RM3,000 on Private Retirement Scheme contributions is extended until the year of assessment 2025.
5. Income tax relief limit for lifestyle has been increased from RM2,500 to RM3,000 ringgit including sports-related expenses.
6. Increased RM1,500 of disabled spouse relief.
7. Expanded RM7,000 study relief to include recognised up-skilling and self-enhancement course.
1. Taxpayers who have lost their jobs due to Covid-19 pandemic, compensation for loss of employment be increased from RM10,000 to RM20,000 for each full year of service for years of assessment 2020 and 2021 the income tax exemption limit.
2. Individual investors who participate in equity crowdfunding platforms, an income tax exemption of 50% from the invested amount or limited to RM50,000 will be given.
3. Stamp duty exemption for purchase of first house worth up to RM500,000.
4. RM500 can be withdrawn monthly from EPF Account 1 up to RM6,000 within 12 months.
5. Employees’ minimum EPF contribution is reduced to 9% starting January 2021.
6. Single individuals earning RM2,500 and below to receive RM350, eligibility reduced to 21 years old from 40 previously.
7. Government has agreed to a one-off payment of RM500 to frontline workers in handling the Covid-19 pandemic.
8. RM1,200 in cash assistance will be disbursed to households with one child with a monthly income of less than RM2,500 with one child.
9. EPF allows withdrawal from Account 2 for the purchase of life insurance and takaful coverage products and for critical illnesses.
10. RM200 aid per child under 6 years old and RM150 aid per child between the ages of 7 to 18 years old will be given to underprivileged families.
11. RM450 allowance will be given to workers in the OKU community.
12. RM500 allowance will be given to senior citizens, workers who take care of the OKU community and patients with chronic illnesses.
13. RM180 will be given to each B40 individual for internet subscription or mobile phone costs.
14. The government will be giving RM50 one-off to youths between the ages of 18 to 20 years old. The money will be credited to their E-wallet accounts.
15. Government will introduce MyStep, providing 50,000 short-term job opportunities.
16. GLC and GLIC will contribute RM150 million into the Tabung CERDIK to provide laptops to 150,000 students at 500 schools as a pioneer project.
17. RM5 public transport pass for students from Standard 1 up to Form 6 and also the OKU community.
18. Unlimited public transport pass worth RM30 called MY30 will be continued and it will also be expanded to Penang and Kuantan.
19. The government will be setting up a training and relocation program for 8,000 staff members from Malaysian aviation companies with an allocation of RM50,000,000.
20. Starting 1 January 2021, the government will be imposing an excise duty of 10% on all smoking equipment, electronic or non-electronic including vapes.
There are government initiatives to support the SMEs too. They include the following:
1. Extension Wage Subsidy Program for another 3 months, specifically for the tourism and retail sector at a rate of RM600 per month for workers earning 4,000 ringgit and below. Limit of 500 employees per application raised.
2. The government to allocate RM510 million for the purpose of financing to Bumiputera SMEs and micro SMEs through TEKUN Nasional and PUNB.
3. Government allocates RM95 million for special micro-credit fund to empower women entrepreneurs.
4. A guidance programme for more than 2,000 women entrepreneurs will be provided under the Micro Entrepreneur Business Development Programme (BizMe).
5. RM20 million will be allocated as soft loan under the TEKUN Sports scheme to ensure the survival of sports facility operators.
6. RM1.9b of soft loan and grants to SMEs and MSMEs under PRIHATIN and PENJANA packages.
Hope this covers most of those that you are interested. Let us know your thoughts on this year’s Budget!