2021 had been a year of examination, reflection and anticipation. At the start of the year, many had anticipated that the year 2021 would be associated with economic and social recovery. With ambitious plans in place, including a historic Covid-19 immunisation campaign, Malaysia was expected to benefit greatly from the economic surge as the year progressed.
However, the past 10 months have proven 2021 to be a more challenging year as the worsening health crisis meant a significant delay to economic recovery efforts. The government agenda is now focused on reviving, recovering and revitalizing the economy. It is amidst this backdrop that Budget 2022 was tabled. The Honorable Finance Minister, building on the economic plans outlined in the previous year’s budget, laid out the largest budget in Malaysia’s history in hopes to accelerate our path to recovery. Budget 2022, themed Keluarga Malaysia, Makmur Sejahtera, aims to tackle a wide range of challenges faced by Malaysian families.
Measures such as direct cash aid and the JaminKerja salary incentive signal the government’s seriousness in tackling issues faced by the most vulnerable in Malaysian society. As we deal with the issues of the day, the government has kept one eye on the future, introducing incentives for digital businesses whilst also reaffirming its climate change objectives through the introduction of the first ever Malaysian voluntary carbon market.
Deferment of Income Tax Instalment Payments
Micro, Small and Medium Enterprises (MSMEs) will be given a deferment for payment of monthly tax instalments for a period of six (6) months until 30 June 2022.
Special Revision of Estimate of Tax Payable
Companies will be given an option to submit a revision of income tax estimates in the eleventh (11th) month of the basis period before 31 October 2022.
Extension of Special Tax Deduction on Rental Reduction for Business Premises
The special tax deduction on rental reduction for business premises will be extended for another six (6) months for rental reduction from
January 2022 to June 2022.
Extension of Special Tax Deduction on the Cost of Renovation and Refurbishment of Business Premises
The special tax deduction of up to RM300,000 for renovation and refurbishment of business premises will be extended to 31 December 2022.
Tax identification number ("TIN")
TIN will be implemented beginning year 2022 to broaden the tax base.
Extension of Tax Deduction for Companies under the [email protected] Programme
Companies registered under [email protected] are given further tax deduction on rental expenses for employee accommodation. This incentive will be extended to 31 December 2022.
Extension of Tax Incentive for the Organisation of Arts, Culture, Sports and Recreation Activities in Malaysia
The tax incentive in the form of income tax exemption of 50% on statutory income will be extended for another three (3) YAs.
Tax Incentives for Upstream Petroleum Industry
Companies with Late-Life Assets ("LLA") projects in the upstream petroleum industry will be given tax incentives for LLA Production Sharing Contracts awarded from 1 January 2020 to 31 December 2029
Review of Tax Incentives for Structured Internship Programme ("SIP")
The tax incentive for SIP will be expanded to include students undertaking Masters, Professional Certificates and Malaysia Skill Certificate Level 1 and 2, and the tax incentive period will be extended to YA 2025
Grants for Rukun Tetangga Areas ("KRT")
Grant of RM6,000 for each KRT to support the agenda of unity and culture of volunteerism at the community level.
Financing for Youth Entrepreneurs
Bank Simpanan Nasional and Agrobank have earmarked financing of RM150 million to facilitate youths venturing into entrepreneurship.
Grants under the Malaysian Incentive Community Empowerment Initiative
Grants of up to RM10,000 for 2,000 associations registered with The Registry of Societies Malaysia in the category of welfare, social, safety and basic rights.
Funds available for SMEs
RM14.2 billion worth of funds will be made available in 2022 for SMEs, through SME Bank, PUNB, BPMB, AgroBank, MIDF, and MARA as well as through BNM Funds for SMEs.
Assistance to Listed Companies on Bursa
Companies listed on Bursa Malaysia that were affected by the Covid-19 pandemic will get an injection of additional funds through a Government-owned SPV in the form of equity instruments or other related instruments.
Business Financing Guarantee
Syarikat Jaminan Pembiayaan Perniagaan ("SJPP") will enhance the scheme with an additional guarantee limit of RM10
billion to provide guarantees for loans dedicated to Bumiputera businesses.
Bantuan Keluarga Malaysia ("BKM")
Discounts on Repayment of PTPTN Loans
Discounts for repayment of PTPTN loans from 1 November 2021 to 30 April 2022 will be given at:
Incentive for Hiring Unemployed Malaysians
Employers who hire Malaysians who have not been actively employed will be given incentives in the form of:
Extension of EPF Contribution Rate of 9%
Minimum employees’ EPF contribution rate reduction from 11% to 9% will be extended up to June 2022.
Increase of SOCSO Insured Salary Ceiling
SOCSO insured salary ceiling will be increased from RM4,000 to RM5,000 in 2022.
Budget 2022 Crowe Chat Vol.7/2021