NEWS
Budget 2020 highlights
KUALA LUMPUR, Oct 11 -- Following are the highlights of Budget 2020 tabled in Dewan Rakyat today by Finance Minister Lim Guan Eng.
The budget is themed "Driving Growth And Equitable Outcomes Towards Shared Prosperity".
Budget 2020 is anchored on four thrusts;
- Driving Economic Growth in the New Economy and Digital Era
- Investing in Malaysians; Levelling Up Human Capital
- Creating a United, Inclusive and Equitable Society
- Revitalisation of Public Institutions and Finances
- Accelerated Capital Allowance and Automation Equipment Capital Allowance for manufacturing sector on the first RM2 million and RM4 million incurred on qualifying capital expenditure is extended to the assessment year 2023
- The incentive is also expanded to include the services sector on the first RM2 million incurred on qualifying capital expenditure for assessment years 2020 to 2023
- Government allocates RM50 million for the repair and maintenance of roads leading to Port Klang
- Transport Ministry to commence feasibility studies on the Serendah-Port Klang Rail Bypass for cargo shipments and the Klang Logistics Corridor -- a dedicated privatised highway connecting Northport and Westport, both projects estimated to cost RM8.3 billion
- Government allocates additional RM50 million to stimulate public-private partnerships for the Kota Perdana Special Border Economic Zone at Bukit Kayu Hitam
- RM1.1 billion allocated to support projects for corridor development activities, including RM50 million for the development of the Chuping Valley Industrial Area in Perlis by NCIA and RM69.5 million for Kuantan Port-related projects by ECERDC
- Government will provide the necessary infrastructure to construct a Digital Malaysia through a public private partnership, involving an investment of RM21.6 billion, half of which will be financed by the government
- Malaysian Communications and Multimedia Commission will allocate RM250 million to leverage various technologies, including satellite broadband connectivity
- Government will introduce RM50 million 5G Ecosystem Development Grant
- RM25 million will be allocated to set up contestable matching grant fund to spur more pilot projects on digital applications such as drone delivery, autonomous vehicle and blockchain technology
- Government allocates RM20 million to Malaysian Digital Economy Corporation (MDEC) to grow local champions in creating digital content
- Government will provide 50 per cent matching grants of up to RM5,000 per small-and-medium enterprise (SME) for the digitalisation of their operations such as electronic point of sale systems
- Government allocates RM550 million to provide Smart Automation matching grants to 1,000 manufacturing and 1,000 services companies to automate their business processes
- RM70 million allocation for MDEC to set up 14 one-stop Digital Enhancement Centres to facilitate access to financing and capacity building for businesses
- RM20 million allocation for Cradle Fund to promote early stage innovations
- RM10 million allocations for Ministry of Entrepreneur Development to focus on advocacy and awareness for halal certification, halal product development and providing platforms for local players to tap on the US$3 trillion global halal market
- Market Development Grant’s ceiling per company raised to RM300,000 yearly from RM200,000
- Government raises the ceiling for the participation in each export fair to RM25,000 from RM15,000
- RM50 million allocated to encourage SMEs to engage in more export promotion activities
- Government allocates additional RM50 million to My Co-Investment Fund under the Securities Commission Malaysia to help finance underserved SMEs
- Government does not intend to bring back GST
- Government to offer a one-time RM30 digital stimulus to qualified Malaysians aged 18 and above with annual income less than RM100,000 to boost use of e-wallets.
- Allocation for the Agriculture Ministry increases to RM4.9 billion in 2020 from RM4.4 billion in 2019, with special focus towards enhancing incomes of farmers.
- Government proposes to increase fishermen allowance from RM200 to RM250 per month in 2020, with a total allocation of RM152 million
- Government to allocate RM30 million for the production of glutinous rice in Langkawi
- To strengthen the development of the finance ecosystem, Bank Negara Malaysia is proposing a two-phase restructuring plan to form a new financial institution through the merger of Bank Pembangunan Malaysia, Danajamin Nasional, SME Bank and the Export-Import Bank of Malaysia
- A Special Committee on Islamic Finance will be established to formulate the Islamic Economic Blueprint and organise outreach initiatives and professional courses to promote deeper understanding of Islamic Finance nationwide
- The current tax deductions on the cost of issuance and additional deductions on sukuk issuance costs under the Wakalah principle will be extended for five years until assessment year 2025
- Tax exemption for fund management companies managing Shariah compliant funds and Sustainable and Responsible Investment (SRI) funds, and the tax deduction on the cost of SRI Sukuk issuance will be extended for another three years until assessment year 2023
- Green Investment Tax Allowance and Green Income Tax Exemption incentives will be extended to 2023, and a 70 per cent tax exemption of up to 10 years will be given to companies undertaking solar leasing activities
- Government to support projects through financing programmes under Bank Pembangunan Malaysia Bhd, offering two per cent interest subsidy per annum via Maritime and Logistics Fund (RM1 billion) and RM2 billion Industry Digitalisation Transformation Fund
- Industry Digitalisation Transformation Fund to also support implementation of connectivity projects
- Sustainable Development Financing Fund size increased to RM2 billion from RM1 billion
- Govt allocates RM100 million for small business loans under the Chinese SMEs Financing Programme via Bank Simpanan Nasional and RM20 million under TEKUN Nasional’s Indian Community Entrepreneur Development Scheme, both at an interest rate of four per cent
- Government to allocate a RM550 million oil palm replanting loan fund for smallholders and collateral-free at an interest rate of two per cent per annum, with a tenure of 12 years, including a four-year moratorium on repayment
- Government will allocate RM27 million to support the Malaysian Palm Oil Board’s efforts to market palm internationally and counter anti-palm oil campaigns
- Government will enhance implementation of B20 for the transport sector by end-2020 and increase palm oil demand by 500,000 tonnes per annum
- The government will allocate RM200 million as Monsoon Season Aid to eligible rubber smallholders under RISDA and the Sabah Rubber Industry Board
- Government will provide RM100 million as rubber production incentive in 2020 to enhance the income of smallholders faced with low rubber prices
- The government will allocate RM810 million for the welfare of the FELDA community
- Govenment will provide RM738 million for RISDA and Federal Land Consolidation and Rehabilitation Authority to implement various income-generating programmes to benefit more than 300,000 RISDA and 100,000 FELCRA smallholders
- The government will increase allocation to the Agriculture Ministry to RM4.9 billion in 2020 from RM4.4 billion in 2019 with a special focus towards enhancing income of farmers
- The government will allocate RM524 million to Ministries and Public Agencies to enhance Malaysia’s research and development (R&D) framework
- Government will allocate RM30 million for R&D matching grants for collaborations with industry and academia to develop higher value added downstream uses of palm oil, specifically tocotrienol in pharmaceuticals and bio-jet fuel
- Government to continue ensuring at least 30 per cent of tenders of each ministry reserved for Bumiputera contractors
- Government invites public private partnership proposals for the plan to upgrade Sultan Azlan Shah Airport in Ipoh
- The Cabinet will consider all proposals, including those from Khazanah Nasional to acquire or dispose all shares of Plus Malaysia Bhd
- There will be 18 per cent discount in average toll charges across PLUS highways
- RM10 billion allocation for Rent to Own financing scheme by financial institutions with the support from the government via a 30 per cent guarantee
- Government to lower threshold on high rise property prices in urban areas for foreign ownership to RM600,000 from RM1 million
- Government will extend the Youth Housing Scheme administered by Bank Simpanan Nasional from Jan 1, 2020 to Dec 31, 2021
- Youth Housing Scheme to offer 10 per cent loan guarantee through Cagamas to enable full financing borrowers and RM200 monthly instalment assistance for the first two years for 10,000 home units
- The government will enhance the Real Property Gains Tax treatment by revising the base year for asset acquisition at Jan 1, 2013 for assets acquired before Jan 1, 2013 compared with the previous base year of Jan 1, 2000
- Government records fiscal deficit of 3.7 per cent of GDP in 2018 and on track to achieve targeted deficit of 3.4 per cent in 2019
- Government expect fiscal deficit to be at 3.2 per cent in 2020 and to reduce further on average at 2.8 per cent of GDP over the medium term
- The 2020 Budget will allocate a total expenditure of RM297 billion, excluding RM2 billion reserved for contingencies, compared with RM277.5 billion in 2019
- The 2020 Budget comprises operating expenditure of RM241 billion and development expenditure of RM56 billion
- Government expects to collect RM244.5 billion in revenue in 2020, an increase of RM11.2 billion from 2019, after excluding the one-off Petronas dividend of RM30 billion
- Govt proposes to introduce a new band for taxable income in excess of RM2 million, to be taxed at 30 per cent, which is a two percentage point increase from the current rate of 28 per cent
- Government to allocate RM11 million towards initiatives by Education Ministry in collaboration with MESTECC to inculcate the Science, Technology and Innovation (STI) culture.
- Government to continue to allocate 50 per cent of tourism tax to respective state governments to support their efforts in conjunction with Visit Malaysia 2020.
- RM1.1 billion allocation for Tourism, Arts & Culture Ministry to fulfil Visit Malaysia 2020 aspirations.
- Government to launch Malaysians@Work initiative aimed at creating better employment opportunities for youth and women, reducing over-dependence on low-skilled foreign workers.
- Graduate@Work programme to hire graduates who have been unemployed for more than 12 months. The graduates who secures work will receive a wage incentive of RM500 per month, for a duration of two years.
- To further support SMEs growth, the SMEs’ chargeable income (which are subjected to 17 per cent income tax rate) will be increased to RM600,000, provided that the SMEs have a paid up capital of less than RM2.5 million and annual sales less than RM50 million
- Government will merge the Special Commissioner of Income tax and the Customs Appeal Tribunal to form the Tax Appeal Tribunal
- Digital Service Tax will be implemented starting Jan 1, 2020
- Government expects to generate RM3 billion revenue from assets disposal via competitive bidding process
- Bandar Malaysia Project will include a People’s Park, additional 5,000 units of affordable houses and will have greater Bumiputera participation throughout the project. Proceeds from the project will be utilised to reduce 1MDB debts
- Women@Work programme to create 33,000 job opportunities per year for women aged 30-50 years old who have stopped working for a year or more. Wage incentive for returning women workers is RM500 per month for two years.
- Wage incentive for Malaysians hired to replace foreign workers under the Local@Work programme is either at RM350 or RM500 per month, depending on the sectors, for two years.
- Malaysia@Work initiative to cost RM6.5 billion over five years and create an additional 350,000 jobs for Malaysians and reduce foreign workers dependency by more than 130,000.
- To ease the financial burden of parents who enrol their children in registered nurseries and kindergartens, individual tax relief for fees paid to be increased from RM1,000 to RM2,000.
- Government to review the Employment Act 1955 in order to increase maternity leave from 60 days to 90 days effective 2021.
- Government to review the Employment Act 1955 in order to extend the eligibility to overtime from those earning less RM2,000 to those earning less than RM4,000 per month
- The government reopened registration for Grade 1 (G1) Bumiputera contractors beginning Sept 1 to participate in government procurement and they get to bid for government jobs worth RM1.3 billion
- Gross domestic product expected to grow by 4.7 per cent this year and 4.8 per cent in 2020
- Inflation is expected to remain well anchored at two per cent in 2020
- Allocation for Islamic affairs under the Prime Minister’s Department will be increased to RM1.3 billion in the 2020 Budget, from RM1.2 billion in 2019 Budget.
- Allowance to Al-Quran dan Fardu Ain class (KAFA) teachers to increase by RM100 a month.
- RM30.6 billion to be allocated to the Health Ministry.
- Starting 1 January 2020, MySalam covers 45 illnesses from the existing 36, including polio and terminal illness.
- Government to expand PeKA B40 coverage to those aged 40 and above.
- To support last-mile connectivity in rural and urban areas, government to subsidise bus operators with an allocation of RM146 million in 2020.
- Government to allocate RM15 million for Safe City Initiative to provide outdoor lighting, parking with security features for motorcycles, anti-climb fences, and safety advocacy programmes.
- RM299 million to implement Sports For All programme, including rehabilitating and upgrading of overall sports facilities, youth & sports complexes and community sports complexes throughout the country
- RM179 million to be allocated for preparation in international sporting events such as the Tokyo Olympics 2020 and Hanoi Sea Games 2021
- RM45 million in Budget 2020 for the National Football Development Programme, compared to the RM15 million in 2019 Budget.
- RM443.9 million allocated towards flood mitigation projects and RM150 million towards the maintenance of existing flood retention ponds.
--BERNAMA
OTHER NEWS
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