The Malaysian government announced the 2021 budget which estimated that the total expenditure for next year will be 322 billion ringgit, an increase of nearly 8 billion ringgit from the 2020 budget.
Funds will be allocated to various sectors and industries across the country, with the main goal of improving the well-being of the people and promoting the economy of countries severely affected by COVID-19.
Covid-19 Pandemic & Public Health
Statutory government debt raised from 55% to 60% of GDP as per Akta Langkah-langkah Sementara Bagi Pembiayaan Kerajaan (Penyakit Koronavirus 2019) / Temporary Act for Government Expenditure
Ceiling of Kumpulan Wang Covid-19 raised by RM20b to RM65b to fund the Kita Prihatin initiative
RM1.8b for MCO enforcement and public health facilities including PPE, reagents and disposables
RM1b for Covid-19 3rd wave prevention
RM3b+ for Covid-19 vaccines
Frontliners one-off payment of RM500 as appreciation
RM90m pneumococcal immunisation programme for children expected to benefit 500,000 children
Tax exemption for vaccination pneumococcal, influenzas and Covid-19 up to RM1,000 for self, spouse and children
Tax relief for medical expenses on serious diseases increased from RM6,000 to RM8,000 for self, spouse and children
Tax relief for full medical checkup ailments increased from RM500 to RM1,000 for self, spouse and children
Tax relief for parents/special needs child medical expenses and care increased from RM5,000 to RM8,000 for self, spouse and children
mySalam protection program extended to included heart stents and prosthetics
B40 given RM50 voucher for Tenang Protection Scheme for purchasing takaful and personal accident coverage
Safeguarding the Welfare of Vulnerable Groups
Improving Financial Aid
OKU Incapable of Work assistance increased from RM250 to RM300
Older Persons, Carers of OKU and chronically ill patient increased from RM350 to RM500
OKU workers incentive allowance increase from RM400 to RM450
Children in household poverty assistance increased from RM150 per child (age 7-18) / RM200 per child (age 6 below) up to RM1,000 per family
RM2.2b for BPN2.0
Bantuan Sara Hidup (BSH) replaced by Bantuan Prihatin Rakyat (BPR)
Household income <RM2,500: RM1,200 (up to 1 child) / RM1,800 (2 or more children)
Household income RM2,501 – RM4,000: RM800 (up to 1 child) / RM1,200 (2 or more children)
Household income RM4,001 – RM5,000: RM500 (up to 1 child) / RM750 (2 or more children)
Individuals age 21 below and income <RM2,500: RM350
B40 telecommunications credit for new phone/internet subscription: RM180
Alleviating the Rakyat’s Cost of Living
Individual tax relief for income RM50,001 – RM70,000 reduced by 1%
EPF employee contribution reduced from 11% to 9% from Jan – Dec 2021
EPF Account 1 withdrawal of RM500 monthly application open from Jan 2021 if you have lost your job
SOCSO EIS allowance for job hunting increased by 3 months (M1: 80% pay; M2-M6: 50% pay; M7-9: 30% pay)
Severance pay tax exemption for 2 tax assessment years increased from RM10,000 to RM20,000 for each year of service
Assistance to Farmers and Fishermen
RM1.7b subsidies, aid and incentives for farmers and fishermen
Living allowance for fishermen increased from RM250 to RM350 per month
RM400m to pay for FELDA settlers debt interest and new development
Generating and Retaining Jobs
PenjanaKerjaya Initiative (Hiring Incentive)
RM3.7b for JanaKerja Scheme to provide 500,000 new job opportunities including skills upgrading and retraining
Recruitment of workers under SOCSO 6 months incentives:
Workers earning >RM1500 incentive increased from RM800/mth to 40% of monthly salary (limited to RM4000/mth)
Employers 20% additional incentive to hire OKU, long-term unemployed and terminated workers
Sectors with high reliance on foreign workers (e.g. construction and plantation sector) special incentive 60% of monthly salary to hire local workers replacing foreign workers (40% channeled directly to employers and 20% to local workers)
Training claims for employees hired under PenjanaKerjaya raised from RM4000 to RM7000 for high-skilled or professional certificate programme
Reskilling and Upskilling
RM150m for KPT-PACE for fresh graduates given RM3,000 for professional certification programme
RM100m for HRDF for programmes with private employers
RM100m for MDEC for ICT talent transition
RM100m for IRDA and SEDIA for skills development affected by closed borders and drop in foreign tourists
RM30m for PERHEBAT for army veterans
Tax relief RM1,000 for approved skills upgrading programmes
MySTEP (Shorterm Employment Programme)
RM700m for short term contractual employment in public service and GLCs
Targeted Wage Subsidy
RM1.5b targeted wage subsidies extension for tourism and retail sectors of RM600 per employee with pay RM4,000 below for up to 500 employees
Social Protection
EPF withdrawal from Account 2 to purchase life insurance and takaful and critical illnesses coverage
Tax relief for PRS extended until 2025
RM24m for SOCSO payments to army volunteers, reserve police force, religious teachers, contracted public servants, and delivery riders
Prioritizing the Inclusiveness Agenda
Empowering the Bumiputera
RM11.b for Bumiputera development to reduce inequality including:
RM6.5b for education through institutions such as MARA and UiTM
RM510m for SME and Micro SMEs through TEKUN and PUNB
RM800m for development of Bank Pembangunan Malaysia and SME Bank
RM2b for SME through SJPP
RM1.3b for development programmes including Dana Kemakmuran Bumiputera and other projects
Upholding Islam Tenets
RM1.4b for Islamic development through PM’s department
Waqf through PNB’s ASNB qualifying for tax relief which will be channeled to national waqf projects
One-off special payment of RM500 to religious reachers
Enhancing the Role of Women
RM95m micro credit through TEKUN, MARA and AgroBank
RM50m for Islamic financing through Ar-Rahnu BizNita
RM21m for local social support centers providing support for women facing domestic violence, divorce and abuse
RM30m for child care centers at government buildings, especially hospitals
RM20m for child care centers at private employer’s premises
RM10m for cervical cancer screening program and mammogram test subsidy incentive
Community-based Initiatives
RM177m for Chinese community improvement of education facilities, housing and new village development
RM100m for Indian community socioeconomic empowerment through Indian Community Transformation Unit (MITRA)
RM15m to Cultural Economy Development Agency (CENDANA) for the implementation of various art and cultural programmes
RM158m for Orang Asli socialeconomic empowerment including new kindergartens and protection of Native Customary Rights
OKU tax relief increased from RM3,500 to RM5,000
Tax deduction for employers hiring senior citizens until 2025
Enhancing Rural Infrastructure
RM2.7b allocation for rural infrastructure:
RM1.3b for rural roads
RM632m for clean water
RM250m for electricity
RM355m for poor to build or repair homes
RM121m for lights
Mobile banking services in Sabah and Sarawak
Youth and Sports Development
Apprenticeship program incentive of RM1,000 for employers hiring fresh graduates for 3 months and RM4,000 grant application for development programmes
RM50 e-wallet credit via eBelia (eYouth) programme for youths age 18-20
RM19m for Healthy Malaysia National Agenda for healthier lifestyle and reduce the risk of diabetes, hypertension and obesity
RM103m for upgrading and maintenance of sports facilities including RM15m for e-Sports development
Lifestyle tax relief increased from RM2,500 to RM3,000 and expanded to include sports competitions entrance fees and e-newspapers
Ensuring the Well-being of the Rakyat
Digital Connectivity
RM500m for Jalinan Digital Negara (JENDELA) for connectivity in schools
RM150 for laptop computers as Tabung CERDIK pioneer project funded by GLC and GLIC
Access to Quality Education
RM50.4b to Ministry of Education, which is the highest allocation at 15.6% of budget
RM420m for daily milk supplement scheme
RM800m for upgrade and maintenance of government schools and government-assisted schools
RM50m for stable internet connection in universities through MYREN (Malaysian Research & Education Network) broadband access upgrade from 500bps to 10Gbps
RM100m loans for higher education students with PTPTN loan for laptop loan purchase through Skim BSN MyRinggit-i COMSIS
SSPN-i RM8,000 annual tax relief extended to year 2022
Increasing Home Ownership
Full stamp duty exemption for 1st home purchase below RM500,000 with purchase date between Jan 1, 2021 until Dec 31, 2025
Stamp duty exemption for abandoned properties transferred for new contractor and original home buyer with purchase date between Jan 1, 2021 until Dec 31, 2025
RM1.2b for affordable and low-cost housing
Rent-to-own schemes until 2022 for PR1MA developments
Public Transport
My30 unlimited travel pass extended to Penang and Kuantan
RM5 monthly unlimited travel pass for OKU
Defending the Nation’s Sovereignty and Security
RM16b allocation to Ministry of Defense
RM17b allocation to Ministry of Home Affairs
RM2.3b to upgrade military assets
RM27m to upgrade cyber-security
Business Continuity and Economic Resilience
RM500m High Technology Fund provide by BNM to support high technology and innovative companies.
Special tax rates of 0%-10% for 10 years through PENJANA extended 1 year until Dec 31, 2022.
RM100m to maintain the infrastructure of industrial parks.
RM20m for Malaysia Techlympics and Science Space programmes to create expertise in AI and robotics among youth.
RM25m for Micro Franchise Development and Affordable Franchise programmes, and Buy Made in Malaysia programme.
RM150m to implement Shop Malaysia Online initiative to encourage online spending.
RM50m for training and placement for employees of airline companies.
RM150m for SME Digitalisation Grant Scheme and Automation Grant and eligibility relaxed.
RM50m allocated for P2P financing platforms especially invoice financing on matching investments basis.
RM30m allocated for ECF financing on matching grant basis and 50% income tax exemption (max RM50,000).
HRDF levy exemption for 6 months for tourism sector and companies affected by Covid-19 from Jan 2021.
Freezing on new import licensed for cigarettes and tightening renewal of import license.
Taxes will be imposed on all cigarettes and tobacco products (no more duty-free).
Excise duty of 10% on all e-cigarettes and vaping products, and RM0.40 per mm on e-cigarette liquids.
Continuation of High-Speed Rail Project (HSR) subject to further discussion with Singapore.
Construction of 2nd phase Klang 3rd bridge, Central Spine Project, bridge across Sungai Marang, upgrading Federal Road connecting Gerik, Perak to Kulim, upgrading Pulau Indah, Klang Ringroad, Construction Pan Borneo Highway Sabah, and Cameron Highlands Bypass road.
e-Rebate of RM200 for locally made air-con or fridge through SAVE 2.0 program.
RM600 special finance aid for public servants grade 56 below and RM300 for pensioners and veterans with no pensions.