Finance Minister Datuk Seri Tengku Zafrul has has revealed that the allocation for Budget 2021 will be bigger than the RM297 billion Budget 2020. The total expenditure for Budget 2021 is RM322.5 billion.
The budget, themed “In Our Strength Lies Our Collective Victory”, is anchored on three thrusts, namely the people’s wellbeing, business continuity and economic resilience. Here’s some of highlights:
1. RM500 monthly withdrawal from EPF Account 1 for 12 months
Finance Minister Tengku Zafrul has announced during the Budget 2021 tabling that EPF members can withdraw up to RM500 from Account 1 for a period of 12 months starting next year. Members who want to withdraw from their Account 1 can apply in January 2021.
2. Eligible households to receive up to RM1,800 in cash aid under Bantuan Prihatin Rakyat (BPR)
Finance Minister also announced financial aid for rakyat through the Bantuan Prihatin Rakyat for the year 2021. For households earning less than RM2,500 per month, they will receive RM1,200 if they have one child. Households with two or more children will receive RM1,800.
Moreover, for households earning RM2,501 to RM4000 per month, RM800 will be given to those with one child. RM1,200 will be given to those with two and more children.
Households earning RM4,001 to RM5000 will receive RM500 for one child, and RM750 if they have two children or more. For single individuals aged 21 and over earning less than RM2,500 will be given RM350.
3. RM180 telco credit for B40 individuals
The government also announced eligible individuals will receive RM180 in telecommunications credit and it will benefit 8 million individuals from the B40 group. This allocation will cost the government RM1.5 billion.
This credit can be used for internet subscription or to subsidise the purchase of new smartphones. Telcos will also provide matching benefits worth RM1.5 billion in the form of free data.
4. RM50 eWallet credit for youths under Program eBelia
Under Budget 2021, the government is allocating RM75 million for the eBelia program to promote a cashless lifestyle. This will provide RM50 eWallet credit for eligible youths. According to Finance Minister, the eBelia program will benefit 1.5 million Malaysians.
5. Tax relief on medical treatment
The government will raise the tax relief for individual, spouse and children’s medical expenses for serious medical ailments as well as a full health screening.
Tengku Zafrul said the tax relief limit would be increased from RM6,000 to RM8,000 for the individual taxpayer, spouse and child. The tax relief for a full health screening would be increased from RM500 to RM1,000. He also said tax exemption would be given for the vaccination cost for personal, spouse and children with a limit up to RM1,000.
6. Lower income tax for those earning between RM50,001 and RM70,000
Finance Minister said the income tax of those earning between RM50,001 and RM70,000 will be lowered by one percentage point. This initiative is expected to benefit 1.4 million taxpayers.
7. Budget 2021: Highlights for entrepreneurs
- The government to provide RM4.6 billion to empower Bumiputeras.
- The government to allocate RM510 million for the purpose of financing to Bumiputera SMEs and micro SMEs through TEKUN Nasional and PUNB.
- The government to provide RM800 million through Bank Pembangunan Malaysia dan SME Bank’s capacity-building programme
- Government allocates RM95 million for special micro-credit fund to empower women entrepreneurs
- A guidance programme for more than 2,000 women entrepreneurs will be provided under the Micro Entrepreneur Business Development Programme (BizMe).
- The government has allocated RM500 million to implement the National Digital Network (JENDELA) initiative in 2021.
- Full stamp duty exemption will be given for deeds of transfer and loan agreement for the first house purchase worth up to RM500,000.
- Full stamp duty exemption for deeds of transfer for rescue contractors and original buyers of abandoned housing projects has been extended by another five years.
8. Other highlights in Budget 2021
- Government allocates RM400m to help FELDA settlers’ resolve loan interest and for new income development programme.
- RM2.7bil allocated for rural infrastructure development
- RM400mil to help FELDA settlers to resolve their debts
- Stamp duty exemption for purchase of first house
- RM7.4b to expand broadband services in 2021 to 2022
- Employees’ minimum EPF contribution is reduced to 9% starting January 2021
- Government has agreed to a one-off payment of RM500 to frontline workers in handling the Covid-19 pandemic
- For 2021, the government said it will allocate RM1bil more to fight the third wave of the Covid-19 pandemic
- The government provides almost RM28 billion specifically for subsidies, assistance and incentives.
- The EPF allows withdrawal from Account 2 for the purchase of life insurance and takaful coverage products and for critical illnesses.