[UPDATED] Budget 2022 gets biggest allocation ever at RM332.1 bil

KUALA LUMPUR – A total of RM332.1 billion has been allocated under Budget 2022, higher than all previous budgets.

The largest allocation of RM52.6 billion went to the Education Ministry, followed by RM32.4 billion for the Health Ministry (MoH).

Out of the RM332.1 billion allocated in Budget 2022, the government has provided RM233.5 billion for operating expenditure, RM75.6 billion for development expenditure, and RM23 billion under the national Covid-19 fund.

Despite being an expansionary budget, the fiscal deficit for 2022 is 6% compared with 6.5% in 2021.

The government has also introduced Bantuan Keluarga Malaysia worth RM8.2 billion to benefit 9.6 million recipients.

Under the RM32.4 billion set aside for MoH, RM2 billion is for vaccination expenses and RM2 billion for supplies.

In Budget 2022, the Higher Education Ministry is set to receive RM14.5 billion.

Meanwhile, a special RM2,500 tax relief has been given for the purchase of handphones, computers, and tablets.

The government’s JaminKerja initiative is expected to create 600,000 job opportunities with its RM4.8 billion allocation.

National Higher Education Fund Corporation borrowers are expected to get 10%-15% discounts, depending on the chosen repayment option.

Budget 2022 has also provided tax deductions of RM2,000 to RM7,000 for upskilling courses, while an excise duty on chocolate or cocoa, malt, coffee, and tea-based pre-mixed drinks containing sugar has been introduced by the government.

A total of RM11.4 billion has been allocated for Bumiputera empowerment.

In providing more goodies for the education sector, early schooling assistance of RM150 for each student will be allocated, benefitting three million students. For this, a total of RM450 million has been allocated.

Under the education sector’s Supplementary Meal Plan, a total of RM400 million has been allocated. This is to ensure students get adequate daily nutrition.

Meanwhile the government, through the Securities Commission Malaysia, will make it compulsory for public-listed companies to have at least one female director on their boards. 

Good news for contract doctors

The contracts of 10,000 medical, dental and pharmaceutical officers is to be extended from two to four years.

A tax relief for the cost of medical expenses or consultation involving registered psychiatrists, clinical psychologists and counsellors has also been extended in Budget 2022.

A total of 80,000 job placements in the public sector and government-linked companies (GLCs) is to be continued via the government’s MySTEP initiative.

To increase consumer spending, the Employee Provident Fund (EPF) has extended the period for the minimum contribution from 11% to 9% until June next year.

Under Budget 2022, an eStart cashless transaction scheme will be introduced, which will see a one-off amount of RM150 deposited into the e-wallets of those aged between 18 and 20.

The government is also to fully bear the cost of motor vehicle licences for the disabled.

A sales and services tax exemption for cars will be extended till June 30, 2022 and employers are to get tax relief and exemptions on cost of boosters shots.

Meanwhile, the government is allocating RM2 billion under the housing credit guarantee scheme to help those without steady income, such as gig economy workers, to purchase homes.

Daily milk programme for poor students is to be continued with RM400 million allocation.

The much talked about real property gains tax has been removed for house sales from the sixth year onwards.

The government is also to continue supporting equity crowdfunding and peer-to-peer financing with RM80 million allocation in matching grants under Malaysia Co-Investment Fund, in addition to Bank Pembangunan Malaysia Bhd’s RM100 million investment.

A matching grant of RM100 million for Bumiputera’s small and medium enterprises (SMEs) to explore aerospace industry has also been allocated, while SMEs are allowed to postpone income tax instalments for six months until June 30, 2022.

A special tax exemption has been provided for building/commercial unit owners who give at least 30% rental discount.

As for smart automation matching grants, a total of RM100 million has been allocated, benefitting 200 manufacturing and services companies. 

About 600,000 undergraduates from B40 families are to get one tablet each, involving an allocation of RM450 million.

In continuing the wage subsidy programme targeting 300,000 workers, the government has allocated a sum of RM2 billion.

Budget 2022 is also providing targeted wage subsidies for employers in the tourism industry who have seen their income reduced by at least 30%.

As for registered tour operators, a total of RM85 million has been allocated for special assistance to over 20,000 of them.

Budget 2022 has provided income tax exemptions for organisers of artistic and cultural activities, and sports competitions and international-level recreational activities which will be extended until 2025.

Meanwhile, a total of RM250 million has been allocated for Shop Malaysia Online and Go-eCommerce Onboarding.

To promote the usage of electric vehicles, the government has provided full exemption on import, excise duties and sales tax for those vehicles.

As for goodies for the agriculture sector, a total of RM1.7 billion in subsidies has been allocated besides incentives for farming and fisheries industries and RM1.5 billion in subsidies for seeds and fertiliser. 

Bursa is to set to launch a Voluntary Carbon Market as a voluntary platform for carbon credit trading between green asset owners and other entities.

As widely speculated, the windfall profit levy threshold for crude palm oil prices is to be increased from RM2,500 per tonne to RM3,000 per tonne for Peninsular Malaysia and from RM3,000 per tonne to RM3,500 per tonne for Sabah and Sarawak. 

The tax rate for Sabah and Sarawak will also be raised to 3%, in line with the rate in Peninsular Malaysia, when prices exceed the threshold.

Under Budget 2022, Bank Negara will allocate RM1 billion towards assisting SMEs in adopting sustainable and low-carbon practices.

The government will also issue ringgit-denominated sustainable sukuk of up to RM10 billion to finance eligible social or nature-friendly projects.

To enhance digital connectivity in 47 industrial areas and 630 schools, especially those in rural areas, a total of RM700 million has been allocated.

Meanwhile the SME Digitalisation Grant Scheme will be increased to RM200 million next year, with RM50 million for Bumiputera micro entrepreneurs in rural areas.

A total of RM20 million is to be allocated to each state for projects related to food security, tourism, and nature conservation.

The country’s 1.3 million civil servants from Grade 56 and below will get RM700 special financial aid each while one million government retirees will get RM350 each, altogether involving a RM1.3 billion allocation.

The government is also introducing Cukai Makmur, a special once-off tax on companies generating high profits, whereby the first RM100 million in taxable earnings will be taxed at 24%, while the remainder will be taxed at 33% for the tax assessment year of 2022.

Sales tax is to be imposed on low-value items sourced overseas sold by online sellers and sent to Malaysia via air courier.

Under Budget 2022, services tax is to be imposed on delivery services provided by service providers including e-commerce platforms, except for food and beverage deliveries and logistics services.

The government is extending the 100% sales tax waiver on CKD passenger vehicles and the 50% sales tax exemption on CBU passenger vehicles, including MPVs and SUVs, until June 30, 2022. – The Vibes, October 29, 2021