Summary of The Budget 2021

By ICDM

The Malaysia Budget 2021

Themed “Resilient as One, Together We Triumph” (Teguh Kita, Menang Bersama), the Malaysian Budget 2021 was announced on 6 November 2020. Full speech of the Minister of Finance is available here.

The proposed Budget 2021 is a continuation from the PRIHATIN, PRIHATIN SME PLUS, PENJANA and KITA PRIHATIN stimulus packages. This budget is the largest expenditure in history with a value of RM322.5 billion – with higher Government spending, selective tax reliefs and breaks and targeted incentives to support private domestic demand. From the amount allocated, RM236.5 billion is for operating expenditure, RM69 billion for the national development and RM17 billion for the COVID-19 Fund. The Government revenue collection for the year 2021 is expected to come from direct tax (RM131.9 billion), indirect tax (RM42.5 billion) and non-tax revenue (RM62.5billion). The Government do not introduce any form of new taxes as taxpayers are still grappling with the impact of the pandemic.

Key proposed allocations

5 billion for Bantuan Prihatin Rakyat (BPR)
RM 7.4 billion to build and upgrade digital infrastructure
RM 4.6 billion for Bumiputra entrepreneur’s empowerment
RM 3.8 billion on transportation infrastructure development
RM 2 billion for PENJANA Kerjaya
RM 2 billion on Green Technology Financing Scheme 3.0 (GTF3.0)
RM 1.5 billion for targeted wage subsidy
RM 1.5 billion for Jaringan Prihatin Programme

RM 1 billion investment incentives package for high value-added technology

Key Highlights

Personal	Corporate
Reduction of individual income tax rate, EPF contribution and withdrawal from EPF Preferential 15% personal tax rate for non-Malaysian citizens holding key positions in companies who relocate their operations to Malaysia under the PENJANA initiative Extension of tax incentive for returning expert programme Increase in the limit of income tax exemption on compensation for loss of employment and medical expenses	Extension and expansion of PENJANA Incentives Tax incentives (including manufacturing of pharmaceutical products, export of private healthcare services, Industrialised Building System Components, Principal Hub, Global Trading Centre, Regional Corridor Developments and Equity Crowd Funding) Review of income tax exemption on Green Sustainable and Responsible Investment Sukuk grant Tax deduction for employers

Personal

Corporate

Reduction of individual income tax rate, EPF contribution and withdrawal from EPF
Preferential 15% personal tax rate for non-Malaysian citizens holding key positions in companies who relocate their operations to Malaysia under the PENJANA initiative
Extension of tax incentive for returning expert programme
Increase in the limit of income tax exemption on compensation for loss of employment and medical expenses

Extension and expansion of PENJANA Incentives
Tax incentives (including manufacturing of pharmaceutical products, export of private healthcare services, Industrialised Building System Components, Principal Hub, Global Trading Centre, Regional Corridor Developments and Equity Crowd Funding)
Review of income tax exemption on Green Sustainable and Responsible Investment Sukuk grant
Tax deduction for employers

More detailed Budget 2021 Summary

Budget commentaries

ICDM Post-Budget PowerTalk | Wednesday, 18 November 2020 | 2.00pm – 3.30pm | Virtual

At this session, we will be exploring

A snapshot of the Budget
Top 3 corporate tax proposals that every Board member should know
Key personal tax issues that could have an impact on Board members in their individual capacity

Watch recording here.

Photo by Pedro Lastra on Unsplash.