Budget 2022 Less Revenue Bigger Deficit As Country In Post Covid Recovery

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Finance Minister Tengku Zafrul Abdul Aziz is tabling Budget 2022 in the Dewan Rakyat today.
The budget is expected to have bipartisan support, pursuant to a memorandum of understanding signed between the government and Pakatan Harapan.
Follow Malaysiakini's live report on the budget:



Minister ends speech with 'war against Covid-19 not over' reminder
6.00pm: Tengku Zafrul ends his speech by reminding MPs that Malaysia's battle against Covid-19 is not over.
"People are still suffering. Our frontliners have not returned to their families and the war is still raging," he adds.
For a second year in a row, the budget speech was not met with jeers from the opposition.


RM700 bonus for civil servants, RM350 for pensioners
5.59pm: The government announces a bonus of RM700 for the 1.3 million civil servants in Grade 56 and below.
Another 1 million pensioners will receive RM350.
In announcing several incentives for various civil service departments, Tengku Zafrul expressed his gratitude to the frontliners battling Covid-19 and thanked them three times on behalf of the government.


Windfall tax
5.55pm: The government will introduce a one-off corporate tax of 33 percent for any income after RM100 million for the year 2022.
This tax is known as "cukai makmur" (prosperity tax). The corporate tax for income below RM100 million remains unchanged at 24 percent.


Tax base to be expanded
5.53pm: Foreign income received in Malaysia will be taxable from Jan 1 onwards.
Low-value goods imported from abroad that are sold online and brought into the country through airmail will be subjected to sales tax.
A service tax will be imposed on delivery services provided by online marketplaces.
All companies vying for government contracts must obtain a compliance certificate from the Inland Revenue Board from Jan 1, 2023.


Fiscal Responsibility Act for greater accountability
5.50pm: The government plans to legislate a Fiscal Responsibility Act to improve the accountability and transparency in the country's fiscal management.
Tengku Zafrul says the bill is expected to be ready next year.
The government is also planning to implement a "public expenditure review" in cooperation with the World Bank to ensure the efficiency and efficacy of public spending on the delivery system.
"This will ensure that we get the best value out of every ringgit spent on the rakyat," adds the minister.




Green initiatives, tax free electric vehicles
5.40pm: Bursa Malaysia will manage a "voluntary carbon market" in order for the trade of the carbon credit.
Electric vehicles (EV) will be effectively tax-free as these vehicles will not be subjected to import duties, excise duties and sales tax. EV owners will also benefit from tax relief of RM2,500.
The government will raise another RM10 billion through its Suku Kelestarian (sustainability bonds) for social or environmentally friendly projects.





RM1,000 tax relief for domestic tourism
5.35pm: The government will maintain the RM1,000 tax relief for domestic tourism next year.
Other measures to help the tourism industry includes a targeted wage subsidy scheme for tourism operators who are seeing a dip in revenue of at least 30 percent.
The government is also providing RM600 million in financing under the Penjana Tourism Financing and BPMB Rehabilitation Scheme. 

New grants for businesses

5.30pm: The government will allocate RM100 million in grants for the aerospace industry. However, this is limited to bumiputera applicants.
The government will also provide RM100 million in grants for companies that want to introduce automation into their business.
Another RM423 million in grants will be prepared for companies to perform research and development.




Helping businesses to get back on their feet
5.20pm: Scheduled payments for micro, small and medium enterprises can be deferred for up to six months until June 30, 2022.
Landlords who provide rental discounts to businesses will be granted tax relief.
Unabsorbed business losses can be carried forward for up to a maximum of 10 consecutive years from the previous seven years.


Subsidies for firms to renovate due to Covid-19
5.15pm: The government will subsidise companies that wish to improve seating or air circulation in view of the Covid-19 pandemic. The maximum subsidy proposed is RM300,000.
Companies registered under the Safe@Work will benefit from a RM50,000 tax relief for providing safe accommodation for staff.


RPGT loosened
5.10pm: The real property gains tax (RPGT) will not be applied for properties sold after the sixth year. The existing RPGT structure for properties sold before the sixth year stays.
The government will provide RM2 billion in guarantees for gig-workers seeking housing loans.


Tax holiday for vehicles
5.05pm: The government will not impose any sales tax for passenger vehicles assembled in Malaysia until June 30 next year.
Imported vehicles will be given a 50 percent discount in sales tax.


Tax exemption for e-sports earnings, RM5m facility for drone sports
5.02pm: The government will allocate RM20 million next year to help the growth of e-sports. This includes RM5 million to build a facility for drone sports.
After congratulating Malaysians on their performance at the recently concluded Dota 2 tournament in Romania, the minister announces that e-sports earnings will be tax exempted.
Foreign income is usually tax exempted.




Subsidies for apprenticeship to increase
5.00pm: The government pledges to provide RM900 in subsidies for an apprenticeship, up from RM800 previously.
However, the government is suggesting that employers provide a matching allowance. The government will prepare RM150 million in financing for youth entrepreneurs.


Women empowerment, more bite for police's D11 unit
4.50pm: The Securities Commission will order all public listed companies to appoint at least one female on the board of directors by Sept 1 next year.
The government will build more childcare centres in government offices. Tax relief for childcare valued at RM3,000 will be extended until 2023.
More funding for the D11 police unit which specialises in sexual crimes and crimes against children. Another 100 people will be added to this team.


Special funding for Chinese new villages, Indian entrepreneurs
4.47pm: The government will provide special funding for Chinese new villages to repair houses and funding schemes for entrepreneurs.
There will also be special funding for Indian entrepreneurs through the Tekun micro-credit scheme and the Malaysian Indian Transformation Unit (Mitra).
Special funding for natives of Sabah and Sarawak for cultural activities. Special funding for the Orang Asli which includes subsidies for school-related activities.
Rukun Tetangga will be eligible to apply for RM6,000 grants.


Tax rebates increased for attending reskilling courses
4.40pm: The government is increasing tax rebates for those who attend reskilling courses to RM2,000 from the previous RM1,000. This tax relief can be applied up to 2023.


JaminKerja scheme to reduce unemployment rate to 4pct
4.33pm: The unemployment rate was 4.6 percent as of Aug 2021.
The government will introduce the JaminKerja job placement scheme aimed at putting 600,000 people to work.
Under this scheme, the government will subsidise 20 percent of the salary for the first six months and 30 percent for the next six months.
However, this scheme is limited to salaries below RM1,500 only.
JaminKerja will also incentivise the hiring of disabled persons with higher subsidies - 30 percent for the first six months and 40 percent for the next six months.
This is limited to salaries below RM1,200 only. Malaysia's poverty line is a monthly income of RM2,280.
Tengku Zafrul says JaminKerja is expected to reduce unemployment to 4 percent.





Discounts for PTPTN loans
4.30pm: National Higher Educaiton Loan Fund (PTPTN) discounts:
Full payment: 15 percent discount
50 percent payment: 12 percent discount
Scheduled salary deduction scheme: 10 percent



Students from B40 families to get free tablet computers
4.28pm: The government will provide RM100 for each teacher to buy teaching tools. Students from B40 families in higher learning institutions will be given free tablet computers.
Some 600,000 students are expected to benefit from this scheme.
The government will continue to allow RM2,500 in tax relief for the purchase of mobile phones and computers.


Edu ministry gets largest slice, RM120m for vernacular schools
4.25pm: The Education Ministry will continue to receive the most funding, up 4.5 percent from this year.
The government will provide pre-school students with a RM150 cash handout. RM1 billion will be allocated for renovation and repair of schools. Whereas RM120 million has been earmarked for Tamil and Chinese vernacular schools.
The Health Ministry's budget for 2022 will increase by 1.47 percent.


Sugar tax expanded, excise duty for e-cigarette products
4.25pm: The sugar tax will be expanded. Excise duty will be applied to malt, coco and chocolate beverages. Excise duty will be applied for electronic cigarette products.




Cash handouts from RM300-RM2,500
4.15pm: Prihatin one-off cash handouts -
Families with income of less than RM2,500 a month and with three or more children: RM2,000
Single parents with income of less than RM5,000: Additional RM500
Additional RM300 for households with senior citizens





'Malaysian family, prosperous and peaceful'
4.12pm: The theme for Budget 2022 is "Keluarga Malaysia, makmur sejahtera" (Malaysian family, prosperous and peaceful).
It is based on three core concepts "rakyat yang sejahtera" (people's wellbeing), resilient businesses and a prosperous economy.


Economic growth of 5.5pct -6.5pct expected
4.10pm: The government expects Malaysia's economy to grow between 5.5 percent and 6.5 percent next year.
In August, Bank Negara predicted that growth for this year will be between 3.0 percent and 4.0 percent.


Largest budget on record
4.00pm: Budget 2022 is RM332.1 billion, up 3 percent from the previous year and is the largest budget on record.
The government is expecting revenue to drop by 1.22 percent and therefore forecasts a deficit of 6 percent.
Total budget for 2022: RM332.1 billion (↑ 3 percent, 2021: RM322.54 billion)
Operational expenditure: RM233.5 billion (↑ 6.3 percent, 2021: RM219.6 billion)
Development expenditure: RM75 billion (↑ 22.5 percent, 2021: RM61.2 billion)
Projected deficit for 2022: 6 percent (2021: 5.4 percent [estimate]) - Mkini

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