Budget 2024 in Malaysia Summary and Background information

By
Zaraki Kenpachi
-

YB Tuan Lim Guan Eng. – the Malaysian finance minister, present budget 2024 in Malaysia on 11 Oct 2019. The central theme of the budget 2024 of Malaysia is “Driving growth and equitable outcomes towards shared prosperity.” This budget is set towards the shared prosperity vision for 2030.

This budget focuses on the four main objectives, and the strategies are as follows:

  • Driving economic growth in the new economy in the digital era

The strategy is simple, like making Malaysia the preferred destination for investments by accelerating the digital economy. Strengthening economic diversity and enhancing access for business finance.

  • Leveling human capital by investing in people

According to the budget 2024, the Government is increasing job opportunities for the people of Malaysia. They are investing in education and other talents while modernizing the labor market.

  • Creating a united, inclusive and equitable society

The plan is to create a united equitable society through inclusive development. Promoting housing access, better health and transportation services, unity via sports are the main strategies.

  • Revitalization of public finance and institutions

The fulfillment of this objective can be done by strengthening governance, institutions, and integrity. The commitment of fiscal consolidation can also be considered.

Here is the summary of the Budget in Malaysia 2024, have a look at the key points.

Economical outlook:

Malaysia’s economy continues to show improvement with the GDP growth of 4.7% at the start of the year 2019. There are hopes that it will be better and rise to 4.8% in 2024. The private sector will be the backbone of the Malaysian economy, especially in the construction and services sections.

Moreover, the prices are reduced to its lower level in half of 2019 by 0.2%. According to estimates, the inflation rate can reach 0.9 to 2% in 2024. We will discuss the areas of budget and tax proposals as well.

KEY FOCUS AREAS

Destination for investments:

The customized packaged incentives of 1 billion will be granted for the next 5 years for the sake of:

  • Fortune 500+ companies in high technology, creative and new economic sectors that will invest 5 billion in Malaysia.
  • 10 million will be allocated to the MITI to expedite the investment approval. It will also focus on post-approval investment and realization.
  • To the most competitive companies that will grow globally and export products.
  • Another 50 million investment to improve the transportation infrastructure as a regional maritime center and cargo logistics hub.

Financing:

  • 100 million with the ratio of 1:5 matching guarantee to be provided for private equity funds for projects bidding overseas.
  • The formation of the new financial institution to merge between Danajamin Nasional, Bank Pembangunan Malaysia, SME Bank and the Export-Import Bank of Malaysia. It will strengthen the finance ecosystem.
  • Islamic finance to develop the Islamic finance ecosystem by the establishment of a special committee.

To bring digitalization:

Implementation of the NFCP in the next 5 years with high speed and quality connectivity on a national basis.

  • A 500 million grant is allocated to digitize the way they used to operate limited first 1 lac SME.
  • Another 550 million for smart automation to encourage business automation.
  • The central bank will finalize its digital bank license framework in 2024 in the first half.
  • About 50 million will be granted to 5G ecosystem development.
  • Improvement of the digital skills of the workforce for tech scholarships and training.

Human capital:

  • Increasing wages up to 1200 MYR per month.
  • Maternity leaves will be for 2-3 months from 2024.
  • Unemployed graduates, women will be provided with 500 MYR of wages per month.
  • Those who earn less than 4K MYR will get overtime claims.
  • PDF will extend coverage to the contract workers.

Intellectual property:

  • Copyright software will be granted for tax exemption for up to 10 years.
  • The commercialism of R&D from research universities to public sectors.
  • Enhancement of R&D in the public sector to public agencies and ministries.

KEY TAX PROPOSALS

Tax incentives:

  • Electronics sectors that are 15 years old will be granted an investment of 50%
  • 100% ACA for automation equipment and 70% for the solar leasing activities.
  • Full tax interception for the companies that bring at least 500 foreign participants for conferences.
  • Tax deduction granted to companies that sport art, culture, and heritage.

Corporate income tax:

  • LLP and SME will be able to get an income tax rate of 17%.
  • Companies will be able to claim allowances for small assets up to 2K MYR per asset. For non-profit, it is 20,000 MYR per year.
  • Tax deduction for secretarial and tax filing will be exceeded to combined 15,000 MYR.

Personal income tax:

  • Non-resident individuals will be taxed at 30%, while resident individuals will be 2 MIO.
  • Income tax exemption for working women will be extended by 2024.
  • 6K MYR granted for expenses for medical treatment.
  • Tax deduction on donations for sports, charitable and other national projects by 10%.

Reference links:

https://www1.treasury.gov.my/index.php/en/budget/item/5542-annual-budget-2020.html

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