Today, Budget 2021 was tabled by Minister of Finance, Tengku Zafrul Aziz.
“The government expects the economy to recover in 2021, and to grow by between 6.5% and 7.5% in line with the stimulus packages and Budget 2021,” he said.
To do that, RM322.5 billion, or 20.6% of our Gross Domestic Product (GDP) will be allocated for Budget 2021.
This marks an increase from the government’s total expenditure allocation for 2020, which has been revised to RM314.7 billion from the initial estimate of RM297 billion.
Budget 2021 will have 3 main objectives:
- The wellbeing of the people
- Business continuity
- Resilience of the economy
Funds To Support Entrepreneurship
RM150 million will be allocated for training programmes and assistance for 100,000 entrepreneurs.
RM150 million will also go towards the Shop Malaysia Online initiative, and RM35 million to promote Malaysia-made products.
RM95 million will be allocated to micro-credit financing for women entrepreneurs.
Meanwhile, RM4.6 billion will be allocated to empower bumiputera entrepreneurs.
RM2 billion in targeted aid will be provided for SMEs, and tax incentives for certain industries will be extended to 2022.
RM1 billion will be allocated towards encouraging investments in technology, including R&D for the electronic and aerospace industries, among others.
Those in the agricultural sector will have a slice of the RM60 million for modernisation programmes in the supply chain, and RM100 million for high-impact and high-value agriculture and livestock operations.
Wage Subsidies
The government will allocate RM1.5 billion to extend the wage subsidy programme for another 3 months, in a targeted manner particularly for those in the tourism sector.
An estimated 70,000 employers and 900,000 workers are expected to benefit from this.
To add on, employers who hire fresh graduates for apprenticeship programmes will get RM1,000 per month for 3 months.
Penjana Kerjaya Initiative
Under the Penjana Kerjaya initiative, employers will be given an additional incentive of 20% to encourage job opportunities for people with disabilities, those who are unemployed long-term, and workers who have been terminated.
For sectors that have a high reliance on foreign workers such as those in construction and plantation sectors, a special incentive of 60% of the monthly salary will be provided.
40% of that will be channelled directly to employers, and 20% to local workers to replace the foreign workers.
These incentives will last for a period of 6 months.
Employers who hire talents under Penjana Kerjaya, the maximum cost of the training programme that can be claimed will be raised from RM4,000 to RM7,000 for employees to undergo a high-skilled programme or a professional certificate programme.
Tax Exemptions
Companies that hire senior citizens will have tax exemptions. Meanwhile, companies that hire former convicts and drug addicts will have an extension of tax exemptions.
Supporting High-Tech & Innovative Companies
A High Technology Fund of RM500 million will be provided by Bank Negara to support high-tech and innovative sector companies.
Supporting Local Productions
The National Development Scheme (NDS) worth RM1.4 billion will be allocated to support the implementation of domestic supply chain development and increase the production of local products such as medical equipment.
The Human Resource Development Fund will levy exemptions for companies in the tourism sector and those still affected by COVID-19 for 6 months. This will be effective come January 1, 2021.
Digital Transformation
RM1 billion will go towards a digital transformation scheme.
RM150 million in grants will be given for the digitalisation and automisation of SMEs.
The government will also allocate nearly RM1.2 billion for micro-credit schemes.
Boosting Equity Crowdfunding
To encourage more individual investors to participate in equity crowdfunding (ECF) platforms, an income tax exemption of 50% from the invested amount or limited to RM50,000 will be given.
RM30 million will be allocated to a matching grant that will be invested into ECF platforms under the supervision of the Securities Commission.
- You can read about our coverage on Budget 2020 last year here.
Featured Image Credit: Tengku Zafrul Aziz, Minister Of Finance