Budget 2021 has been widely expected to be one of the biggest, as it contains many measures to help ordinary Malaysians and to stimulate economic recovery in the midst of the Covid-19 pandemic.
Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz expects the economy to recover in 2021, and grow by between 6.5% and 7.5% in line with the stimulus packages and Budget 2021.
Here are some initiatives that would directly benefit citizens.
1. Help For The B40 Group
The MySalam and Perlindungan Tenang voucher programme for the B40 to be expanded.
RM1.5 billion will be allocated to ensure internet connectivity for the B40 group in the form of credit of RM180 per person. This will benefit 8 million people.
2. RM50 E-Wallet Credit For Youths
The government will set up an eYouth Programme (Program eBelia) which will credit a one-off RM50 to ewallet accounts for those aged between 18 and 20 years old.
Its RM75 million allocation is expected to benefit 1.5 million youths.
3. Civil Servants To Receive Special Finance Aid
A special finance aid worth RM600 will be given to civil servants grade 56 and below.
For pensioners and veterans with no pension, a special financial aid of RM300 will be given.
Both aids will be paid out in early 2021.
4. BPN2.0 Payments In 2021
Bantuan Sara Hidup (BSH), otherwise known as BPN, was introduced to reduce the burdens of citizens in terms of cash flow who were affected by the COVID-19 pandemic.
In January 2021, the BPN2.0 second phase payments with a total of RM2.2 billion will be channelled out.
This comes after channelling their payout of RM2.1 billion to 10.6 million recipients in 2020.
In addition, BSH will be renewed under the name Bantuan Prihatin Rakyat (BPR) with more assistance:
- A household income of less than RM2,500 with one child will receive RM1,200; those with two children or more will receive RM1,800.
- A household income between RM2,501 and RM4000 with one child will receive RM800; those with two children or more will receive RM1,200.
- A household income between RM4,000 and RM5,001 with one child will receive RM500; those with two children or more will receive RM750.
- Single individuals with an income of less than RM2,500 will receive RM350.
With BPR’s allocation of RM6.5 billion, it is expected to benefit 8.1 million people.
5. Tax Reliefs
Lower taxes of 1%
For those earning between RM50,001 and RM70,000, income tax will be lowered by 1%. It is expected to benefit 1.4 million taxpayers.
Those who lost their jobs and are receiving paid compensation, the income tax exemption limit will be raised from RM10,000 to RM20,000 for every year of service completed.
This will be imposed for a period of two assessment years.
Health Related Tax Exemptions
The tax relief limit on personal, spouse and child medical treatment for serious illnesses will be raised from RM6,000 to RM8,000.
For full health screenings, the tax relief will be increased from RM500 to RM1,000.
Tax reliefs for expenses on medical treatment, special needs, and parental care has also been raised from RM5,000 to RM8,000.
A tax exemption for disabled couples will be increased from RM3,500 to RM5,000.
Tax Relief For Parents To Save For Children’s Future
Tax relief of up to RM8,000 for the National Education Savings Scheme (SSPN) will be implemented to encourage parents to save up for their child’s higher education fees.
This will be carried out until the assessment year 2022.
Lifestyle Tax Relief
The lifestyle tax relief limit has been raised from RM2,500 to RM3,000.
It will cover expenses for sports-related expenditures, including participation fees for sports competitions.
The scope of this relief has also been extended to include a subscription for online news sites.
- You can read more on our coverage on Budget 2020 here.
Featured Image Credit: Tengku Zafrul Aziz, Minister of Finance