Upcoming 2021 Budget

 

Two more days to go for our 2021 Budget. We are all looking forward for the budget as we see so many news on the budget expectations and measures that associations/professionals are proposing. 

Especially during though times like this due to the Covid-19 pandemic, our upcoming budget will help us in so many ways. There are so many proposals for tax rate reductions and tax reliefs. Our Finance Minister stated that the Ministry had received about 6.600 proposals for the upcoming budget. Tax rate deductions for both corporate and individuals will really ease the burden off our shoulders. 

Companies will be able to stable up their cash flow and individuals too. However,  a decrease in the tax rates would be challenging for the government. There are many proposals for SST exemptions on certain goods as well. 

The government need to focus on keeping Malaysians employed too as many of them had lost their jobs or had a pay cut. 

We will have to wait until 6th November for our 'new normal budget'  to see what's in store for us! (in a new normal situation). 

2021 Budget

Our Finance Minister, Tengku Datuk Seri Zafrul Tengku Abdul Aziz announced that our 2021 budget will consist of four broad themes:-

• Caring for the people
• Steering the economy
• Sustainable living
• Enhancing public service delivery

Caring for the people

This theme will prominently feature education, employment, social protection and social mobility. The government wants to build new foundations for our economic and and social systems to create a fairer and more wholesome future. 

Steering the economy

This theme will consist ensuring gross domestic product (GDP) growth for 2021, increasing foreign direct investment (FDI) and consumer confidence. 

Sustainable living

Despite the Covid-19 pandemic, the momentum for sustainable investing had not slow down. In fact, companies that embraced and practised environmental, social and governance (ESG) performed better. In Malaysia, our current ESG related incentives include:

• Tax exemptions for management fee incomes for fund management companies managing socially responsible investing (SRI) funds and syariah compliant funds
• The extension of tax deduction for the cost of issuing SRI sukuk
• The extension of the green investment tax allowance (GITA)
• Green income tax exemption (GITE)

Enhancing public service delivery 

Under this scheme, the government intends to support the people and businesses and become more outcome-focused in a targeted manner. Tengku Zafrul said the measures introduced should be impacting live and livelihoods in a meaningful way and not just about the amount of funds disbursed. 

The upcoming budget is scheduled to be tabled on 6 November 2020. We'll just have to wait patiently until then! 



Lochana Nanthacumar

Content Management Analyst

Wolters Kluwer Malaysia