Today on October 29, 2021, Minister of Finance Tengku Zafrul Aziz announced the tabling of Budget 2022. It has overtaken Budget 2021 (RM322.5 billion) as the largest budget allocation announced in Malaysia’s history at RM332 billion.
Budget 2022 follows the theme of “Keluarga Malaysia, Makmur Bersama” and focuses on 3 thrusts:
- Protecting and driving the recovery of lives and livelihood;
- Rebuilding national resilience; and
- Catalysing reforms.
Here’s what Malaysian entrepreneurs and SMEs can expect from Budget 2022.
Across all industries
Funding & relief for SMEs
Equity investments and quasi-equities have been introduced with an RM1.2 billion allocation to help companies with gearing or leverage issues.
RM14.2 billion is the total amount given to BNM’s SME special funds. Meanwhile, the Targeted Relief & Recovery Facility (TRRF) will receive an additional RM2 billion.
For additional funding for affected companies, an injection of RM3 billion will be given. RM2 billion will be given to special strategic investment funds to attract foreign multinational investments.
RM25 million will go towards the mission of increasing trade and investments which will explore high-impact investments and new export markets.
There will be a special tax exemption for MSMEs until June 2022.
Under a targeted wage subsidy programme, RM600 million will be used to benefit over 26,000 employers and 330,000 employees.
Support for SMEs
Innovation hubs to spur IR4.0 will receive RM30 million, and this is expected to benefit 10,000 entrepreneurs.
Cradle will get RM20 million to develop the MyStartup strategy which should create 5,000 job opportunities for over 2,500 companies.
Under the Industry4WRD initiative, RM45 million will go to SMEs and companies in manufacturing and servicing.
The government is mandating that all publicly-listed companies appoint at least 1 woman to its board of directors.
Meanwhile, RM5 billion will be allocated for the Women Leadership Foundation to encourage female participation in the economic sector.
The Jamin Kerja Keluarga Malaysia incentive may be expanded for not more than 356 days to employers who recruit women including single mothers and housewives in their workforce for a period.
RM11.4 billion has been allocated by the government to continue the Bumiputera empowerment agenda, and to bridge the racial gap in the country.
RM200 million will be allocated to the Chinese community to upgrade Chinese villages and enable financing schemes for the community’s SMEs.
RM145 million will be allocated to the Indian community to implement programmes to strengthen its social economy through Tekun Nasional, the National Entrepreneurial Group Economic Fund, under the Indian Entrepreneurs Development Scheme.
An incentive of 20 to 30% of an employee’s monthly salary will be given to employers who hire those who are not actively working.
Furthermore, an incentive of 30 to 40% from an employee’s monthly salary of up to RM1,200 will be given to employers who hire persons with disabilities (PwDs), Orang Asli, and prisoners.
RM1.1 billion will be allocated for training and upskilling programmes to benefit 220,000 trainees, and the tax exemption is increased to RM2,000 for expenses incurred in attending upskilling courses.
Under the Jamin Kerja Keluarga Malaysia initiative, RM4.8 billion is allocated to create 600,000 job opportunities.
For up to 300,000 hires, the initiative offers incentives to employers such as covering 20% of the first 6 months’ pay and 30% of the following 6 months’ pay for hired employees making over RM1,500.
An additional allocation of RM200 million has also been given for join venture programmes with industries.
The MyStep initiative will continue with a target of 80,000 job placements in the public sector and GLCs to be offered.
Finally, an incentive of RM900 per month (for 6 months) will be given to employers who hire apprentices comprising school leavers and graduates aged between 18 and 30.
RM20 million will be allocated to grow Malaysia’s esports industry. This includes RM5 million to develop a drone sports excellence centre.
A total of RM1.6 billion has been allocated for the tourism industry, with RM600 million allocated under the Penjana Tourism Financing and BPMB Rehabilitation Scheme.
Meanwhile, RM85 million will go towards a 3-month special assistance for over 20,000 tourism operators.
RM30 million in matching grants will be given for the purpose of the renovation of budget hotels and homestays.
To spur domestic tourism, the RM1,000 tax rebate will be extended until 2022.
Arts & culture industry
RM50 million will be allocated for the arts and culture industry. Specific agencies like the Cultural Economy Development Agency (Cendana), the National Film Development Corporation Malaysia (Finas), and MyCreative Ventures will also receive RM188mil to continue several recovery initiatives.
To rejuvenate the retail industry, the government is allocating RM33 million towards “buy local” shopping campaigns.
The allocation will be channelled to the Buy Malaysian Products Campaign, Mega Sales Programme and the Khazanah Alam Industri direct selling programme.
Bumiputera SMEs in the aerospace industry will have RM100 million allocated to business matching grants.
Another RM100 million will go to smart automation matching grants for 200 manufacturing and servicing companies.
A total of RM1.7 billion will be allocated to subsidies and incentives for the farming and fishing industries.
Meanwhile, AGRO Bank and BNM will be providing total financing of up to RM1.25 billion for agriculture companies.
There will also be matching grants for small B40 farmers. RM190 million is allocated for monsoon season aid to help 320,000 smallholder farmers.
- You can read more Budget 2022 content here.
Featured Image Credit: Tengku Zafrul Aziz