With Malaysia moving into post-pandemic economic recovery mode, the RM332.1 billion Budget 2022 is the largest ever Malaysian Budget.
So what can we expect in 2022, as the nation continues to mount efforts to address the pandemic while rebuilding the economy and livelihoods? In line with the “Keluarga Malaysia” spirit, Budget 2022 is set out to assure Malaysians that no person or business is left behind or neglected in Malaysia’s development.
Here are some highlights from the planned budget.
STRATEGY 1: RESTORING LIVES AND LIVELIHOODS
Direct Cash Assistance and Welfare
For 2022, the Bantuan Keluarga Malaysia (or BKM) will channel assistance of RM2,000 to households earning less than RM2,500 per month with three or more children. This assistance is an increase compared to the previous Bantuan Prihatin Rakyat (or BPR) where the highest assistance rate was RM1,800.
As an enhancement for 2022, the Government will also provide an additional assistance of RM500 to single parent households earning a monthly income of up to RM5,000. In addition, an additional assistance of RM300 will also be provided to senior citizen households. This means that a single mother or father with three or more children is eligible to receive a maximum BKM of RM2,500.
Access to Public Healthcare Facilities
An additional RM4 billion will be provided specifically to continue the agenda on managing COVID-19, which includes RM2 billion to fund the vaccination programme. Another RM2 billion will be provided to enhance the capacity of public health service facilities including the purchase of medicine, consumables, personal protective equipment (PPE) and health kits.
Quality Education for All
The Ministry of Education Malaysia will continue to receive the largest allocation of RM52.6 billion or 16% of the total estimated Federal expenditure. The Ministry of Higher Education will be allocated a total of RM14.5 billion.
In addition, next year, the Government will continue to upgrade dilapidated schools with an allocation of RM746 million . The bulk of this allocation will go towards upgrading 112 and 165 dilapidated schools in Sabah and Sarawak respectively.
To strengthen the agenda for special needs education, the Government will provide RM50 million, among others, to fund the purchase of teaching aids and to improve the facilities in special needs schools.
In order to ensure that the B40 students are not disrupted, the Government in collaboration with selected telecommunication companies (telcos) will implement the PerantiSiswa Keluarga Malaysia initiative to supply a tablet to every B40 student in institutions of higher learning. For this purpose, the Government will provide an allocation of RM450 million in addition to the commitment of RM65 million from the telcos.
In addition, the Government proposes to extend the special individual income tax relief of up to RM2,500 for the purchase of mobile phones, computers and tablets until 31 December 2022.
Generating & Sustaining Jobs
In line with the spirit of guaranteeing jobs, for the upcoming year, the Government under the Jamin Kerja Keluarga Malaysia (JaminKerja) initiative will guarantee 600,000 job opportunities with an allocation of RM4.8 billion.
Based on the successful implementation of the reskilling and upskilling programme under Budget 2021, more than 85% of trainees have been offered job placements.
It is hoped that through the implementation of the JaminKerja initiative as well as the economic recovery measures, the country’s unemployment rate will reduce to 4% thus returning the nation to full employment.
In an effort to encourage Malaysians to pursue training programmes and acquire new knowledge, the limit of individual income tax relief for up-skilling and self-enhancement course fees will be increased from RM1,000 to RM2,000 and extended to year of assessment 2023. In addition, those who undertake courses with any professional bodies will be eligible for a tax relief of up to RM7,000. Approved courses include professional courses in accounting, finance and ESG-related.
The i-Saraan initiative was implemented to encourage informal sector workers to save for retirement through EPF contributions. Through this initiative, the Government will match a minimum of 15% from the voluntary contributions made by the informal sector workers limited to a maximum of RM250 per year.
For 2022, the Government will expand the beneficiaries of this initiative to include those aged between 55 and 60 years. A total of RM30 million will be provided and is expected to benefit more than 100 thousand existing and new participants.
To provide social protection to housewives and by contributing to EPF and SOCSO, the Government has provided RM80 million under the Kasih Suri Keluarga Malaysia Programme specifically to benefit housewives up to 55 years of age.
Since the outbreak of COVID-19, thousands of our Keluarga Malaysia, who had lost their source of income due to the death of their husband, wife or even parents, have relied on their survivors’ pension under SOCSO. For 2022, the Government plans to increase the minimum pension rate under the Skim Keilatan from RM475 to RM550, which is expected to assist 56,000 households.
Finally, to further encourage private employees to contribute to SOCSO and protect those who lose their jobs, the tax relief limit will be increased from RM250 to RM350 and the scope of relief for SOCSO contributions will also be expanded to cover employee contributions through the EIS.
STRATEGY 2: CULTIVATING KELUARGA MALAYSIA
Recognising the role of women in the decision-making process and to strengthen the governanve and effectiveness of boards, the Government, through the Securities Commission, will make it mandatory to have at least one female Board member for all public listed companies. This initiative will take effect from 1 September 2022 for large cap companies and from 1 June 2023 for the remaining listed companies.
To improve the existing support system for working mothers, RM30 million will be provided for childcare in Government buildings, especially in public hospitals and universities. The Government will also encourage private sector employers to adopt flexible working arrangements, as well as to provide childcare facilities at the office. For this, other than through tax incentives, the Government will also amend guidelines to better facilitate childcare to operate above the first floor of office buildings.
In recognition of working mothers who require childcare services, the Government proposes to the individual income tax relief of up to RM3,000 for fees paid to registered child care centre or kindergarten until the year of assessment 2023.
Community Focused Empowerment
By 2030, Malaysia will potentially be categorized as an ageing nation. To ensure continuous assistance is extended to every senior citizen who needs support, this Budget allocated more than RM635 million for the purpose of welfare assistance, care institutions and senior citizen activity centres.
The aspect of child safety is important especially when travelling on roads. To promote the use of child safety seats in cars, the Government will subsidize 50% or up to RM150 for the purchase of child safety seats by B40 households A total of RM30 million is provided for this purpose and is expected to benefit 188 thousand B40 households.
For 2022, the Government has also agreed to bear the full cost of Motor Vehicle Road Tax on all private vehicles owned by the disabled. Hopefully, this will provide a little relief for the disabled.
Youth and Sports Development
The Government has provided incentives to employers who employ apprentices, namely school leavers and graduates aged 18 to 30 years. For 2022, the Government will improve the monthly incentive from RM800 to RM900 for a period of up six months.
STRATEGY 3: BUILDING A CONDUCIVE LIVING ENVIRONMENT
Alleviating the Cost of Living
To reduce the cost of vehicle ownership, the Government will also extend the 100% sales tax exemption on CKD passenger vehicles and 50% on CBU including SUV and MPV for six months until 30 June 2022.
The Real Property Gains Tax (RPGT) would also no longer be imposed for disposals by individual citizens, permanent residents and companies from the sixth year onwards.