MALAYSIA BUDGET 2022 - AN OVERVIEW - 3RD NOVEMBER 2021 #REBUILDINGHUMANITY - 27 ADVISORY
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Malaysia Budget 2022 – An Overview
3rd November 2021
#RebuildingHumanity 1
Federal Government Revenue & Expenditure Malaysia Budget Breakdown
(RM Billion, 2022)
Federal Revenue & Expenditure Budget Deficit
(RM Billion, 2015 – 2022F) (% of GDP, 2015 – 2022F)
400.0 20.0%
Government Revenue
Government Expenditure DE
Budget Deficit (% of GDP) 332.1 75.6
315.1 314.7 322.5
OE
300.0 286.3 15.0% 233.5
260.7 260.7
250.8
264.4
232.9 234.0
200.0 219.1 220.4 225.1 221.0 10.0%
212.4
RM332.1 billion allocated under Budget
2022, about 3% more than the RM322.5
6.5% billion announced in Budget 2021
100.0 6.0% 6.0% 5.0%
• RM233.5 billion allocated for
3.7% operating expenditure
3.2% 3.1% 3.0% 3.4%
• RM75.6 billion allocated for
development expenditure
- 0.0%
2015 2016 2017 2018 2019 2020 2021E 2022F • RM23 billion for the Covid-19 fund
Source: Budget 2022 Speech – Ministry of Finance Malaysia
Malaysia Budget 2022 – An Overview
Keluarga Malaysia, Makmur Sejahtera
Focus 1: Focus 2 : Focus 3 :
Rakyat’s Well Being Resilient Business A Prosperous & Sustainable Economy
Restoring lives and livelihoods Revive business capabilities Sustainability agenda
Direct Cash Assistance & Welfare Microcredit Scheme Low Carbon Practice
Access to Public Healthcare Facilities Business Financing & Alternative Financing Environment & Biodiversity
Quality Education for All Business Financing Guarantee Community Empowerment
Generating & Sustaining Jobs Ease of Doing Business Sustainability Sukuk
Social Protection
Bridging the economic gap
Cultivating Keluarga Malaysia Driving strategic investments
Development Projects for Recovery
Bumiputera Development & Islamic Pillar Investments in Key Sectors
Inter-Regional Development
Community Empowerment Science, Technology and Innovation
Digital Connectivity Projects
Women Empowerment Perkukuh Pelaburan Rakyat Initiative
(PERKUKUH)
Community Focused Empowerment Fiscal consolidation &
Youth & Sports Development revenue sustainability
Fiscal Responsibility Act (FRA)
Building a conducive living environment Recovery for targeted sectors
Revenue Sustainability Measures
Alleviating the Cost of Living Tourism Industry
Home Ownership Creative Industry
Supporting public service delivery
Access to Public Transportation Retail Industry
Reforming Service Delivery
Rural Infrastructure Agricultural Industry, Food Security &
Commodities Government Servant’s Welfare
National Defense & Public Safety
Source: Budget 2022 Speech – Ministry of Finance Malaysia
#RebuildingHumanity 3
Federal Government Expenditure: Operating Expenditure (OE)
Operating Expenditure by Spending Area
(RM Billion, 2018 – 2022)
300
259.85
250
235.25 241.02 236.54 233.50
54 18 11 9 Transfer Payment*
26
200
62 67 72 Certain Liabilities
56 60
150 27 26 Security
26 24 25
100 Social
90 98 97 96
92
Economics
50
20 15 17 17 Administration
19
16 16 19 19 12
0
2018 2019 2020 2021 2022
Note: * Transfer Payments (payments not on the contribution of productive production factors) such as pension payments,
scholarships, zakat, unemployment allowances. housewife allowance, interest on government loans, and interest on consumer loans.
Source: Budget 2022 Speech – Ministry of Finance Malaysia
Federal Government Expenditure: Operating Expenditure (OE)
Operating Expenditure by Spending Area
RM Million Change in %
Sector
2018 2019 2020 2021 2022 2018 2019 2020 2021 2022
Administration 16,078 15,744 18,903 19,323 12,320 42.4 -2.1 20.1 2.2 -36.2
General Services 14,786 13,935 16,163 15,399 10,160 45.2 -5.8 16.0 -4.7 -34.0
Refunds and Repayments 667 1,267 2,072 3,305 1,560 14.8 90.0 63.5 59.5 -52.8
Foreign Service 625 542 668 594 560 18.8 -13.3 23.2 -11.1 -5.7
Repairs and Renovations - - - 25 40 - - - - 60.0
Economics 20,494 15,492 17,047 17,057 18,800 24.3 -24.4 10.0 0.1 10.2
Agriculture 4,247 3,243 3,562 1,863 3,180 11.1 -23.6 9.8 -47.7 70.7
Development of Mineral Resources 103 105 68 70 70 3.0 1.9 -35.2 2.9 0.0
Trade and Industry 6,243 2,946 3,588 3,495 3,960 105.1 -52.8 21.8 -2.6 13.3
Transportation 6,563 5,811 6,166 6,294 6,530 0.7 -11.5 6.1 2.1 3.7
Relationships 102 95 94 89 90 4.1 -6.9 -1.1 -5.3 1.1
Energy and public utilities 329 310 310 406 440 232.3 -5.8 0.0 31.0 8.4
Feasibility Study - - - 4 - - - - - -
Research & Development 424 637 917 2,554 1,100 58.2 50.2 44.0 178.5 -56.9
Financial 2,351 2,218 2,212 2,142 3,310 -3.9 -5.7 -0.3 -3.2 54.5
Environment 132 127 130 140 120 40.4 -3.8 2.4 7.7 -14.3
Social 89,919 91,727 97,634 96,942 95,970 4.6 2.0 6.4 -0.7 -1.0
Lessons and Exercises 56,385 56,017 60,064 59,139 59,350 6.6 -0.7 7.2 -1.5 0.4
Health & Population 24,975 26,736 28,145 27,504 28,320 5.4 7.1 5.3 -2.3 3.0
Description & Broadcasting 1,294 1,067 1,131 1,206 890 15.0 -17.5 6.0 6.6 -26.2
Housing 36 11 - - 40 -95.0 -69.4 - - -
Culture, Youth and Sports 599 684 804 768 940 -43.1 14.2 17.5 -4.5 22.4
Local Councils, Welfare and Community Services 4,152 3,774 4,153 4,538 3,040 -4.7 -9.1 10.0 9.3 -33.0
Village and Community Development 255 271 259 255 590 7.6 6.3 -4.4 -1.5 131.4
Community Welfare, National Unity and Orang Asli 2,223 3,167 3,078 3,532 2,800 17.6 42.5 -2.8 14.7 -20.7
Security 26,180 23,539 27,048 25,834 25,160 6.4 -10.1 14.9 -4.5 -2.6
State Security 13,614 13,269 14,552 14,479 14,060 5.3 -2.5 9.7 -0.5 -2.9
Defense 12,566 10,270 12,496 11,355 11,100 7.5 -18.3 21.7 -9.1 -2.2
Certain Liabilities 55,650 59,748 62,208 66,718 72,280 9.4 7.4 4.1 7.2 8.3
Pensions and Remuneration 24,528 26,528 27,027 27,526 28,040 12.2 8.2 1.9 1.8 1.9
Expenditure Due to National Debt 30,883 33,000 34,945 39,000 43,100 7.0 6.9 5.9 11.6 10.5
Other Liabilities 239 220 236 192 1,140 117.3 -7.9 7.3 -18.6 493.8
Transfer Payment 25,929 53,600 18,180 10,666 8,970 1.3 106.7 -66.1 -41.3 -15.9
Grants and Loans to the State 3,025 2,551 2,055 2,064 2,050 -0.7 -15.7 -19.4 0.4 -0.7
Statutory Fund 850 38,080 1,041 884 660 -5.7 4380.0 -97.3 -15.1 -25.3
Other Contributions 134 107 82 73 80 13.6 -20.1 -23.4 -11.0 9.6
Other Transfer Payment 21,920 12,862 15,002 7,645 6,180 1.9 -41.3 16.6 -49.0 -19.2
Total 234,250 259,850 241,020 236,540 233,500 9.1 10.9 -7.2 -1.9 -1.3
Source: Budget 2022 Speech – Ministry of Finance Malaysia
Federal Government Expenditure: Development Expenditure (DE)
Development Expenditure by Spending Area
(RM Billion, 2018 – 2022)
100
77.60
75 71.00 2 Contingent Savings
2 9
8
56.70 58.00
Security
2 2 23
48.00 7 7 18
50
2
5 15 Social
15
12
25 Economics
39 40
29 31
26
Administration
0 3 3 3 4 4
2018 2019 2020 2021 2022
Source: Budget 2022 Speech – Ministry of Finance Malaysia
Federal Government Expenditure: Development Expenditure (DE)
Development Expenditure by Spending Area
RM Million Change in %
Sector
2018 2019 2020 2021 2022 2018 2019 2020 2021 2022
Administration 2,724 3,200 3,356 3,964 3,760 2 17.5 4.9 18.1 -5.1
General services 2,602 2,825 2,884 3,353 3,420 3 8.6 2.1 16.3 2.0
Repairs and Renovations 122 375 472 611 340 -15 207.4 25.9 29.4 -44.4
Economics 26,342 29,235 31,019 38,887 40,200 2 11.0 6.1 25.4 3.4
Agriculture 2,523 2,278 2,973 2,894 2,900 4 -9.7 30.5 -2.7 0.2
Development of Mineral Resources 29 39 54 84 30 -84 34.5 38.5 55.6 -64.3
Trade and Industry 4,149 5,721 2,446 3,121 2,090 -16 37.9 -57.2 27.6 -33.0
Transportation 10,479 13,388 12,195 15,036 15,500 -1 27.8 -8.9 23.3 3.1
Relationships 104 90 347 600 980 -30 -13.5 285.6 72.9 63.3
Energy and public utilities 2,746 2,847 4,338 3,330 3,170 -89 3.7 52.4 -23.2 -4.8
Feasibility Study 33 35 80 123 60 -21 6.1 128.6 53.8 -51.2
Research & Development 656 590 631 589 1,610 -9 -10.1 6.9 -6.7 173.3
Energy 3,610 1,742 - - - - -51.7 - - -
Financial - 371 6,221 11,219 11,800 - 1576.8 80.3 5.2
Environment 2,013 2,134 1,734 1,891 2,060 -8 6.0 -18.7 9.1 8.9
Social 11,720 15,183 15,068 18,369 22,670 -4 29.5 -0.8 21.9 23.4
Lessons and Exercises 5,256 8,287 7,864 8,873 11,950 -11 57.7 -5.1 12.8 34.7
Health & Population 1,910 2,257 2,898 4,726 4,460 25 18.2 28.4 63.1 -5.6
Description & Broadcasting 137 111 176 187 470 121 -19.0 58.6 6.3 151.3
Housing 1,167 1,652 1,491 1,834 1,770 34 41.6 -9.7 23.0 -3.5
Culture, Youth and Sports 404 370 448 263 270 -22 -8.4 21.1 -41.3 2.7
Local Councils, Welfare and Community Services 692 748 538 718 2,270 -4 8.1 -28.1 33.5 216.2
Village and Community Development 1,787 1,309 1,183 1,218 1,070 -13 -26.7 -9.6 3.0 -12.2
Land Purchase 1 19 21 207 40 1800.0 10.5 885.7 -80.7
Community Welfare, National Unity and Orang Asli 366 430 449 343 370 -31 17.5 4.4 -23.6 7.9
Security 5,214 7,082 6,557 7,780 8,970 -1 35.8 -7.4 18.7 15.3
State Security 1,372 3,345 3,397 2,920 3,550 32 143.8 1.6 -14.0 21.6
Defense 3,842 3,737 3,160 4,860 5,420 -10 -2.7 -15.4 53.8 11.5
Contingent Savings 2,000 2,000 2,000 2,000 2,000 0 0.0 0.0 0.0 0.0
Total 48,000 56,700 58,000 71,000 77,600 0 18.1 2.3 22.4 9.3
Source: Budget 2022 Speech – Ministry of Finance Malaysia
Federal Government Expenditure: Development Expenditure (DE)
Infrastructure Projects Small and medium projects
Inter-Regional Development
(RM3.53 B) G1 – G4 (RM2.9 b)
Continue the construction of the Sabah Pan Small maintenance projects for schools, Corridor development (RM690 m)
Borneo Highway from Sindumin to offices, buildings, bridges, streetlights and
Rampayan Laut traffic lights (RM800 m) State-specific allocations – RM20 million
per state (RM260 m)
Small projects in local authority areas
Continue the construction of the Sarawak DE allocation for Sabah (RM5.2 b) and
(RM327.8 m)
Pan Borneo Highway from Semantan to Sarawak (RM4.6 b)
Jalan Pujut Link Inter-village roads and federal roads
(RM323.9 m) Mobile Banks - an additional 20 units in 250
Jenang Transfer project, Kedah rural areas
Pavement repair works and slope
maintenance (RM241.3 m)
Continue the Central Spine Road project at
the Paloh 2 alignment to Gua Musang and Small school maintenance projects in army Digital Connectivity Project
completed the Kg Orang Asli Sungai camps, ATM health facilities and Rumah
Chandan alignment to Kg Asap and Raub Keluarga Angkatan Tentera (RKAT)
ByPass (RM200 m) Continuation of JENDELA (RM700 m)
Repairs for facilities damaged by floods ICT network in MOE educational
Build highway packages from Kok Lanas to
(RM175 m) institutions (RM50 m)
Bukit Tiu, Kota Bharu Highway to Kuala
Krai, Kelantan Maintenance of housing lifts, repairs for Digital connectivity in 40 existing PPRs
houses, houses of worships and (RM30 m)
Slope and road improvements from Kg. Tuit slaughterhouses (RM166.9 m) 5G services in major cities in Selangor,
to Kg. Mat Daling (Section 2), Jerantut,
Social Amenities Programme (PAMS) in Johor, Penang, Sabah and Sarawak • SME
Pahang
rural areas including in Orang Asli Villages Digitalisation Grant Scheme (RM200 m)
The construction of the Rantau Panjang (RM81.9 m) Pilot Project - Malaysia Digital Nomad
Floodwall Rural water and electricity supply (RM34.3 m) (RM5 m)
Upgrade sports arenas in various states Keluarga Malaysia Digital Economy
(RM21.5 m) Centres (PEDi)
Source: Budget 2022 Speech – Ministry of Finance Malaysia 8
#RebuildingHumanity
Budget Highlights
1 One-off Special “Prosperity Tax”
4
Expansion of Green Technology Incentive
7 Exemptions on Purchase of Electric
Vehicles (EVs)
(Cukai Makmur) on +RHS (Rainwater Harvesting System)
activities • Full Import Duty exemption on
• 24% Tax rate for first RM100million of
chargeable income
• 100% Green Investment Tax components for locally assembled EVs
Allowance (GITA) on capital expenditure
• 33% Tax rate for remaining chargeable for qualifying RHS activities to be set-off • Full Excise Duty & Sales Tax
income (9% extra) against 70% of statutory income exemption on CKD EVs
Applies to all non-SME companies that generate super
profits in YA 2022 • Full Import Duty & Excise
Duty exemption on imported CBU EVs
2
Removal of Tax Exemption on Foreign
Source Income 5
Exemption of Real Property Gains Tax
(RGPT)
8 Extension of Sales Tax Exemption on
Purchase of Passenger Cars
• Foreign source income derived • Reduced to 0% from the current 5% • 100% Sales Tax exemption of on
by Malaysian tax residents, which is for disposal in the 6th year & onwards locally assembled passenger cars
received in Malaysia will be taxable (CKD) and 50% on imported
Applicable to Malaysian individual citizens,
effective 1 January 2022 permanent residents and persons other than passenger cars (CBU) are further
companies from 1 January 2022 extended until 30th Jun 2022
3 Tax Incentive on Digital Ecosystem
6 Tax Incentive for Social Enterprise 9 Stamp Duty on Contract Notes on Trading
of Bursa Listed Shares
Acceleration Scheme • 3 Years Income Tax Exemption
• 0% - 10% • Increase to 0.15% from 0.10%
Applications received by MOF from 1st Jan 2022 – Stamp Duty Rate on contract notes
Digital Technology Provider 31st Dec 2023
• 100% • Abolised stamp duty cap of RM 200
Digital Infrastructure Provider Effective from 1st Jan 2022
Applications received by MIDA from 30th Oct 2021 – 31st
Dec 2025
Source: Budget 2022 Speech – Ministry of Finance Malaysia 9
#RebuildingHumanity
ESG related items As part of the government’s commitment to meeting the Sustainable
Development Goals (SDGs), the Budget 2022 has incorporate numerous
initiatives that are aligned to the Environmental, Social and Governance factors
Environmental Social Governance
• Low Carbon Practice • Social Protection • Fiscal Responsibility Act (FRA)
o Malaysia to be a Carbon Neutral country as o Expansion of mySalam insurance scheme o FRA aims to improve governance,
early as 2050 to cover the cost of medical devices such accountability & transparency in the
as stents for the heart country’s fiscal management
o Voluntary Carbon Market (VCM) initiative
will be launched under the advocacy of • Women & Community Empowerment o Collaboration with the World Bank in
Bursa Malaysia – as a voluntary platform o Mandatory to have at least One female conducting the Public Expenditure Review
for carbon credit trading between green Board member for all public listed to ensure efficiency & effectiveness of
asset owners companies public spending
o 100% road tax exemption for EVs o RM 230 million of funding will be provided • Reforming Service Delivery
to support women entrepreneurs through o National Identity project – an identity
• Environment & Biodiversity
DANANITA programme & TEKUNITA verification platform, will be implemented
o Nature conservation projects
to enhance connectivity between all kinds
o RM 100 million matching grant with the
o 100 million Tree Planting Campaign with a of transaction systems
contribution of GLC-owned foundation to
target of 20 million tree a year
NGOs to fund various social programmes o MyDIGITAL targets for 80% of
o Grants to support the role of WWF and Government services to utilize cloud
• Alleviating the Cost of Living
APPGM as well as Environmental Partners storage by 2022 – The Digital First
o In total over RM31 billion particularly for
Programme initiative will be introduced to
o RM 70 million of Ecological Fiscal Transfer subsidies, aid and incentives to mitigate the
encourage the usage of cloud computing
(EFT) will be allocated each year to all rising cost of living
in the public sector
states
o Extension of 100% sales tax exemption on
• Sustainability Sukuk CKD & 50% on CBU until 30th Jun 2022
o Issuance of RM 10 billion Sustainability
• Home Ownership
Sukuk denominated in Ringgit Malaysia, to
o RM 1.5 billion on housing projects for low-
be chanelled to eligible social or
income groups
environmentally friendly projects
o Exemptions on RGPT from disposal of real
estate in 6th year onwards
Source: Budget 2022 Speech – Ministry of Finance Malaysia 10Prosperity Tax
Cukai Makmur
Following the COVID-19 pandemic crisis, there is
an increasing need to help affected rakyat.
In ensuring that the health system is more resilient
in facing future threats, the Government proposes
to introduce a one-off special windfall tax to the
companies that generate extraordinary revenue.
The tax, known as Cukai Makmur, companies with
chargeable income up to the first RM100 million
will be subjected to income tax at a rate of 24%
while the remaining chargeable income will be
subject to income tax at the rate of 33% for the
year of assessment 2022.
Source: Budget 2022 Speech – Ministry of Finance Malaysia 11Sector Highlight
• RM6.6b for Technical and Vocational Education and Training (TVET)
• RM1b for school maintenance and upgrading works, including RM140m to JAKIM for tahfiz
Education and religious schools
• RM746m to upgrade dilapidated schools in Sabah and Sarawak
• RM450m to provide RM150 Early Schooling Assistance for each student
• RM450m for the Peranti Siswa Keluarga Malaysia initiative to supply a tablet to every B40
student in institutions of higher learning. In addition, RM65m will be provided by telcos
• RM423m to intensify R&D activities for the development of science and technology. This
includes RM295m to public universities for research and innovation and to encourage industry
collaboration
• RM400m for Supplementary Food Programme for students from low income families
• RM300m to be credited into e-wallet accounts of youths aged 18-20 and full-time students at
institutions of higher learning
• RM200m for collaboration with industries, including the National Dual Training System and
industry certification programmes
• RM120m for the maintenance of 1,800 National-Chinese Schools and National-Tamil Schools
• RM65m for the construction of an Islamic secondary school in Labuan
• RM50m for special needs education
• RM50m to improve the TVET skills of workers in oil and gas welding, industrial automation and
mechatronics
• More than RM40m for a one-time Special Incentive for Teaching Aids
Source: Budget 2022 Speech – Ministry of Finance MalaysiaSector Highlight
• RM8.2b for Bantuan Keluarga Malaysia
• RM2.4b for distribution of welfare assistance to benefit more than 440,000 households
Social
• RM200m for the Chinese community to be used for home repairs, new village development,
Welfare SME Entrepreneur Financing Scheme and others
• RM50m for repairs, maintenance and small development of non-Muslim places of worship in
Local Authority areas
• RM30m to upgrade Government building infrastructure to be OKU friendly
• RM30m to subsidize 50% (up to RM150) for the purchase of child safety seats by B40
households
• RM30m to expand the beneficiaries of the i-Saraan initiative to include Employees Provident
Fund (EPF) participants aged between 55 and 60 years
• RM24m for:
o Expansion of Community Feeding Programme for children from urban poor families in
Selangor, Johor, Penang, Kuala Lumpur, and Putrajaya;
o Expansion of scope of recipients under the Malnutrition Rehabilitation Programme for
Children;
o Establishment of Mothers’ Milk Bank for premature babies in Neonatal Care Unit of
hospitals in Penang, Johor, Terengganu, Sabah and Sarawak
• RM10m to Independent Living Centres and the Government Industrial Training and
Rehabilitation Centre to implement training and mentoring programmes for the disabled
• RM10m to deepen the knowledge of children in Sabah and Sarawak on culture and heritage
matters
Source: Budget 2022 Speech – Ministry of Finance MalaysiaSector Highlight
• RM2.5b for development of rural communities through commodity development programmes:
Agriculture RM1.3b for rehabilitation and development package for FELDA settlers
RM699m for development of smallholder farmers in the rubber industry under RISDA
RM495m for FELCRA participants
• RM1.7b subsidies and incentives for the agriculture and fisheries industry:
RM1.5b for seed, fertilizer, price and paddy production (inclusive of RM40m for huma
paddy fertilizer)
RM150m in incentives for fishermen
• RM1.25b agriculture financing program by Agrobank and BNM
• RM190m Monsoon Season Assistance for 320,000 smallholder farmers
• RM120m to increase food security through:
Various food security projects
National Food Security Strengthening program
Ruminant Feed Incentive Assistance program
SME Techno Entrepreneur Incentive program
• RM35m to implement Smallholder Farmers’ Oil Palm Replanting Stimulus Scheme
• RM20m to address international anti-palm oil campaigns
• RM15m matching grant for the introduction and expansion of the usage of RRIM Hydrobest
technology to B40 smallholder farmers
• RM5m for all Area Farmers Organisation members under the Farmers Smart Card Takaful
Protection Scheme
Source: Budget 2022 Speech – Ministry of Finance MalaysiaSector Highlight
• RM5.2b and RM4.6b to Sabah and Sarawak respectively, for development expenditure such
as implementation of water, electricity, and road infrastructure projects as well as education
Infrastructure and health facilities
• RM2.9b for contractors in Class G1 to G4 involved in small and medium sized projects
involving road maintenance, aging infrastructure and facilities upkeep for public universities,
polytechnics and community colleges and rural social amenities
• RM2.5b for various rural programmes, including RM1.5b for the development of rural
infrastructure in Sabah and Sarawak:
RM1.5b for rural and inter-village road projects
RM485m for rural electricity supply
RM382m for rural and alternative water supply
RM107m for installation and maintenance of street lights, upgrading dilapidated bridges
and preliminary works for the construction of new bridges
RM690m for five regional economic development corridors, comprising six new projects
and 66 extension projects
• RM200m through Infrastructure Facilitation Fund 3.0 for high-impact infrastructure
development activities
• RM30m for the provision of internet facilities in 40 existing People’s Housing Projects
• Expansion of 5G services to 36% of high-density areas, including in major cities in Johor,
Selangor, Penang, Sabah and Sarawak
• In addition, the implementation of national infrastructure development projects worth RM3.5b,
such as the Pan Borneo Highway and Central Spine Road, will continue.
Source: Budget 2022 Speech – Ministry of Finance MalaysiaSector Highlight
• RM14.2b in funding to be made available to SMEs, through SME Bank, PUNB, BPMB,
Agrobank, MIDF, MARA and BNM
SMEs & • RM1.8b interest-free microcredit financing for microentrepreneurs, to be provided through
agencies such as TEKUN, Agrobank, Bank Simpanan Nasional (BSN), Bank Rakyat and BNM
Micro- • RM200m to enhance the SME Digitization Grant Scheme initiative, with RM50m dedicated
enterprises towards Bumiputera microentrepreneurs in rural areas
• RM150m of financing assistance by BSN and Agrobank for youth entrepreneurs
• RM100m matching grant to Bumiputera SMEs to explore business opportunities in the
aerospace industry
• RM74m through PERNAS for training programs, business guidance and a simple zero
financing scheme with a moratorium for the first six months, for franchise entrepreneurs
• RM30m for the Cooperative Economic Recovery Intervention Financing Programme
• RM25m to Halal Development Corporation to execute programmes to develop more Halal
MSMEs that are able to compete internationally
• RM20m to expand the i-TEKAD programme which offers initial capital, microcredit and
structured training to microenterprises
• RM10m for start-up capital under the Waqf SME Halal, Agriculture Waqf and Disaster Waqf
initiatives
• RM10m for the Cooperative Movement Economic Transformation Programme (TRANSFER)
Source: Budget 2022 Speech – Ministry of Finance MalaysiaSector Highlight
• RM4b to continue managing COVID-19:
Healthcare RM2b to fund vaccination programmes
RM2b to enhance the capacity of public health service facilities
• RM100m to sponsor medical specialist programmes for 3,000 medical and dental contract
officers
• RM70m to address mental health issues
• Procurement of 88m doses of COVID-19 vaccines
• Contracts of more than 10,000 medical, dental and pharmaceutical officers to be extended for
a maximum of four years after their two-year compulsory service period
• Expansion of mobile clinic services by university teaching hospitals
• RM250m to continue the Shop Malaysia Online and Go-eCommerce Onboarding campaigns
Digital / • Implementation of the National Digital Identity project in 2022, to ease and encourage safe
digital transactions
E-commerce • The MyDIGITAL initiative which was launched in 2021, now targets 80% of Government
services to utilize cloud storage by 2022.
• Introduction of the Malaysia Digital Nomad programme to create a digital nomad community
and ecosystem in Malaysia
Source: Budget 2022 Speech – Ministry of Finance MalaysiaSector Highlight
• RM1.6b for implementation of key initiatives for the tourism industry:
Tourism o RM600m subsidy under the Wage Subsidy Programme, for tour operators experiencing a
decline in revenue of at least 30%. The Wage Subsidy Program for tour operators will be
extended for three months. The RM600 per month subsidy per employee, limited to 500
employees, is maintained.
o RM600m financing for the tourism sector under PENJANA Tourism Financing and the
BPMB Rehabilitation Scheme;
o RM85m special assistance for a period of three months for tour operators registered under
the Ministry of Tourism, Arts and Culture (MOTAC);
o RM60m for promotional activities and domestic tourism;
o RM50m for the maintenance of tourism infrastructure;
o RM50m of matching grants to companies who organize programs related to arts and
culture; and
o RM30m for:
➢ matching grants for the repair of budget hotels registered under MOTAC;
➢ repair grants for registered homestay owners
• RM20m to the Malaysia Healthcare Travel Council, to strengthen Malaysia’s position as a
preferred health tourism destination
• RM14m to the United Nations Development Programme, to support their efforts in creating
safe tourism and restoration activities in Mersing, Johor and Manjung, Perak
Source: Budget 2022 Speech – Ministry of Finance MalaysiaSector Highlight
• RM700m for continuing digital connectivity efforts in 47 industrial areas and 630 schools,
especially in rural areas, under the National Digital Network initiative
Community • More than RM635m for welfare assistance, care institutions and senior citizen activity centres
Care • RM274m for the Orang Asli community to implement, amongst others, the Orang Asli Standard
of Living Improvement Programme
• RM200m to subsidise the cost of transportation and distribution of basic goods to rural areas
• RM145m for the Indian community for socio-economic empowerment
• RM100m matching grant will continue to be provided to NGOs to fund various social
programmes, with contributions from GLC-owned foundations
• RM50m to implement programmes to encourage active lifestyles
• RM25m to Yayasan Keluarga Malaysia for programmes to protect the welfare, education and
future of orphans
Source: Budget 2022 Speech – Ministry of Finance MalaysiaSector Highlight
• In 2022, the Government will issue RM-denominated Sustainability Sukuk of up to RM10b, the
proceeds of which will be channeled to eligible social or environmentally friendly projects
Environment / • RM1b Low Carbon Transition Facility for Small and Medium Enterprises (SMEs) to adopt
Sustainability sustainable and low carbon practices
• RM450m to implement initiatives that preserve nature and the environment:
o Nature conservation projects
o Programmes to empower involvement of local communities, army veterans and Orang Asli
as biodiversity guardians of forest areas
o Funding zoo operating costs, efforts to increase the breeding of Malayan Tigers and
implementation of the Frozen Zoo programme to preserve the survival of endangered
species
o 100 million Tree Planting Campaign, with a target of 20m trees a year
o Grants to support the role of the World Wildlife Fund (WWF), All Party Parliamentary Group
Malaysia (APPGM) and Environmental Partners
• RM70m annually for the implementation of Ecological Fiscal Transfer (EFT), for the
conservation of biodiversity
Source: Budget 2022 Speech – Ministry of Finance MalaysiaSector Highlight
• RM100m Smart Automation matching grant to companies in the manufacturing and services
sectors, to automate their business processes
Science, • RM45m for technological transformation of SMEs as well as mid-stage companies in the
technology & manufacturing and services sectors, in line with the industrial revolution 4.0 or Industry4WRD
• RM30m for the implementation of the Innovation Hub: Industrial Revolution 4.0 under Technology
innovation Park Malaysia
• RM20m to intensify recovery efforts and build the resilience of the startup economy as part of the
MyStartup strategy
• RM12m matching grants through Collaborative Research in Engineering, Science and Technology
• RM80m to the Kasih Suri Keluarga Malaysia Programme to benefit housewives aged up to 55
years
Supporting • RM30m for childcare in Government buildings
women & the • RM13m to strengthen the Sexual, Women and Children Investigation Division of the Royal
Malaysian Police, in addition to creating 100 new posts
family unit • RM11m to subsidize mammogram tests for high-risk women and cervical cancer screening tests
• RM5m to the Women Leadership Foundation to boost women’s participation in the economic
sector
• Employers of women who have been unemployed for more than 365 days, single mothers, and
housewives will be given an incentive of 30% of the monthly salary for the first six months and
40% for the next six months. The employers must pay a monthly salary of RM1,200 and above, to
be eligible for this incentive.
Source: Budget 2022 Speech – Ministry of Finance MalaysiaTax Measure: Individuals
Foreign-sourced • Existing tax exemption on foreign-sourced income to be removed from 1 January 2022. Malaysian residents, including
income individuals, will be subject to tax on foreign income remitted into Malaysia
Real Property Gains • RPGT will revert to 0% for citizens, permanent residents and noncorporate entities, for disposals in the sixth year and
Tax (RPGT) onwards, with effect from 1 January 2022
Special deduction for • Special deduction for taxpayers, including individuals, that provide rental reductions of at least 30% to their tenants, to be
rental reduction extended until June 2022
Special tax rate for • Application deadline extended for the special tax rate of 15%, which is available for five consecutive years. Applications
nonresidents holding key must now be received by the Malaysian Investment Development Authority (MIDA) by 31 December 2022.
• New individual tax relief of up to RM2,500 to be introduced for purchase, installation, rental and subscription fees for EV
charging facilities, for YA2022 and YA2023
• Scope of tax relief for EPF contributions to be expanded to include voluntary contributions, from YA2022
• Tax relief for SOCSO contributions to be expanded to include Employment Insurance System (EIS) contributions, with the
overall limit increased from RM250 to RM350, from YA2022
• Scope of tax relief for medical expenses for serious diseases in respect of self, spouse and child to be expanded from
YA2022, to include checkup or consultation services related to mental health
• Enhancement of tax relief for technical education fees of RM7,000 as follows:
Exemptions, • Increase from RM1,000 to RM2,000 for expenses incurred for upskilling and self-enhancement courses and this
deductions has been extended to YA2023
and reliefs • Expansion of scope to include approved courses with any professional bodies in the fields of accounting and
finance, as well as environmental, social and governance related fields
• Extension of the following tax reliefs:
• Qualifying domestic travel expenses of RM1,000, up to YA2022
• Childcare fees of RM3,000 paid to a registered childcare centre or kindergarten, up to YA2023
• Purchase of mobile phone, computer and tablet of RM2,500, up to YA2022
• Deferred annuity premiums of RM3,000, up to YA2025
• Introduction / expansion of tax relief for costs incurred for self-funded booster vaccination
• Introduction of tax exemption on recognised e-sport tournament prize money
Source: Budget 2022 Speech – Ministry of Finance MalaysiaTax Measure: Business (General)
Tax losses • Businesses will be able to carry forward losses for 10 YAs, instead of seven. This will apply retrospectively from YA2019.
Tax rate • Introduction of a 33% marginal income tax bracket for companies on chargeable income of more than RM100m, for
YA2022 only. Chargeable income of up to RM100m will continue to be taxed at 24%.
Tax exemption on • Existing tax exemption on foreign-sourced income to be removed from 1 January 2022. Malaysian resident entities will be
foreign income subject to tax on foreign income remitted into Malaysia.
• Stamp duty on contract notes to be increased from 0.1% to 0.15% from 1 January 2022. The existing RM200 cap for each
contract note will be removed.
Stamp duty
• Stamp duty exemption for restructuring or rescheduling of a business loan or financing agreement executed between a
borrower or customer and a financial institution, extended until 31 December 2022.
• All businesses will be permitted to revise their income tax estimates in the 11th month of the basis period, before 31
Tax estimates and October 2022.
administration • A Tax Compliance Certificate will be introduced as a pre-condition for government procurements, from 1 January 2023.
• Tax Identification Numbers will be implemented for all companies, and individuals above 18 years of age, from year 2022.
• Tax deductions of up to RM300,000 on costs of renovation and refurbishment of business premises to be extended until 31
December 2022
• Scope of double deductions for companies sponsoring scholarships for students of higher educational institutions to be
Exemptions, expanded to all fields of study, and extended to YA2025
deductions • Further deduction of up to RM50,000 on rental expenses for employee accommodation under the Safe@Work initiative to
and reliefs be extended, until 31 December 2022.
• Special deductions for taxpayers that provide rental reductions of at least 30% to their tenants to be extended, until June
2022.
• Tax deductions will be provided on costs associated with self-funded COVID-19 booster vaccines
• Scope of double deductions for companies conducting Structured Internship Programmes approved by TalentCorp
Malaysia to be expanded to students pursuing Masters degrees, professional certificates and Malaysian Skills Certificate
Levels 1 and 2, and extended to YA2025
• 50% income tax exemption for organisers of approved art and cultural activities, as well as approved international sports
and recreational activities, to be extended until YA2025.
Source: Budget 2022 Speech – Ministry of Finance MalaysiaTax Measure: Business (by Sectors)
• Extension of double deduction for Anchor companies under the Vendor Development Programme for five years, to 31
Anchor companies under
December 2025. Double deductions on qualifying expenses will also be increased from RM300,000 to RM500,000 per
the Vendor Development
YA, for three consecutive YAs. Anchors must have a Memorandum of Understanding signed with the Ministry of
Programme
Entrepreneur Development and Cooperatives by 31 December 2025.
• From 1 January 2022, the windfall profit levy on CPO will be imposed as follows:
Current threshold for CPO price Proposed threshold for CPO price
Location Proposed levy rate
(RM / metric tonne) (RM / metric tonne)
Crude palm oil (CPO) Peninsular
RM2,500 RM3,000 3.0% (status quo)
Malaysia
Sabah and
RM3,000 RM3,500 3.0% (increased by 1.5%)
Sarawak
• Incentives for activities under the Digital Ecosystem Acceleration Scheme (DESAC):
• Digital Technology Providers: 0% to 10% income tax rate for up to 10 years (new companies), or 10% for up to
10 years (existing companies).
Digital economy
• Digital Infrastructure Providers: Investment Tax Allowance of up to 100% on qualifying capital expenditure and
for up to 10 years.
Applications must be received by MIDA between 30 October 2021 and 31 December 2025.
• 100% Green Investment Tax Allowance and 70% Green Income Tax Exemption to be extended to include Rainwater
Green economy Collection and Utilisation System projects. Applications must be received by MIDA between 1 January 2022 and 31
December 2023.
Source: Budget 2022 Speech – Ministry of Finance MalaysiaTax Measure: Business (by Sectors)
• Six-months deferment of income tax instalment payments for MSMEs, until 30 June 2022.
• Extension of stamp duty exemption for various instruments relating to mergers and acquisitions involving MSMEs, for
applications received by the Ministry of Entrepreneur Development and Cooperatives between 1 July 2021 and 30 June
2022 and for documents executed by 31 December 2022.
Microenterprises and small
• Tax rebate of up to RM20,000 per YA, available to a new MSME for the first three YAs, to be extended. This will now
and medium enterprises
apply to MSMEs which are incorporated and commence operations by 31 December 2022.
(MSMEs)
• Stamp duty exemption for P2P loan or financing agreements executed between MSMEs and their investors from 1
January 2022 to 31 December 2026. The stamp duty exemption is only available for P2P financing provided via P2P
platforms registered and recognised by the Securities Commission.
• Tax exemption on all income received by an accredited Social Enterprise for up to three YAs, for applications received by
Social enterprises
the Ministry of Finance between 1 January 2022 and 31 December 2023.
• Accelerated capital allowances on purchases of locally-assembled excursion buses, extended to YA2024.
• Entertainment duty exemption on admission to entertainment venues in the Federal Territories, including theme parks
Tourism
and cinemas, extended until 31 December 2022
• Tourism tax exemption extended until 31 December 2022
Manufacturing and • Reinvestment allowance (RA) extension for a further two years (YA2023 and YA2024) on qualifying capital expenditure,
agriculture where the initial RA and Special RA periods have expired
Source: Budget 2022 Speech – Ministry of Finance MalaysiaBNM's Fund for SMEs
Bank Negara Malaysia has established additional or enhanced existing
financing facilities to provide relief for, and to support the recovery of SMEs.
Following the Budget 2022 announcement, the Bank is committed to further
increase the allocation under the BNM's Fund for SMEs by RM4.5
billion, bringing the total available funds as at mid-September 2021 to
RM11.2 billion.
Source: Budget 2022 Speech – Ministry of Finance Malaysia 26What do we think?
Budget 2022 revives key Pakatan Harapan measures to We are heartened by the government’s continued
improve social security and boost employment, but falls support for the digitisation of our youths through the
short of highlighting measures or strategies to evade an eStart programme, allocating a total of RM300 million to
impending budget crisis in the near future. benefit two million youths next year.
Tony Pua Terence Pang
Pakatan Harapan’s Economic Committee Chairman Shopee COO
The stimulative budget will also reinforce the economic Budget 2022 is rightly focused on putting the country
tailwinds and ‘feel good’ factor for an early general on the road to recovery in the aftermath of the
election that is expected to be called by the ruling pandemic. The measures and reforms presented bode
coalition party next year. well for a more resilient and ultimately resurgent
economy, against the backdrop of a gradual reopening of
Dr Yeah Kim Leng commercial activities and robust trade performance.
Sunway University Economics Professor Julian Neo
DHL Express Malaysia and Brunei Managing Director
These are hard-hit communities. The government is
surely hoping the budget will have the incidental effect We applaud Budget 2022 which appropriately balances
of the rakyat liking them.If we are kind, we can call (the the mix between reducing income inequality, expanding
budget) inclusive. If we are not so kind, we can call it on targeted assistance to households and businesses
overly ambitious, because it appears they are trying to while also investing into the nation’s healthcare and
cover too many things. basic infrastructures.
Dr Oh Ei Sun Tan Sri Teh Hong Piow
Singapore Institute of International Affairs Senior Fellow Public Bank Founder
Source: Budget 2022 Speech – Ministry of Finance Malaysia
27What do we think?
In the budget speech, we still speak of the B40, but the We are heartened by the government’s continued
M40 are actually the most affected group, and are often support for the digitisation of our youths through the
ignored even though they are loyal taxpayers. eStart programme, allocating a total of RM300 million to
Dr Barjoyai Bardai benefit two million youths next year.
Universiti Tun Abdul Razak Professor Terence Pang
Shopee COO
I would say that it is more of a pre-election budget than
a post-emergency budget. It looks to me like the budget We believe more can be done to help revitalise the
has attempted to help many – which is not wrong per se property sector, especially as the nation is still at the
– but without thinking of the long-term consequences, beginning stages of its journey to recovery.
or without clarifying or improving the way in which Sheldon Fernandez
revenue will be generated. PropertyGuru Malaysia Country Manager
Dr Carmelo Ferlito
Center for Market Education (CME) CEO
Generally, MBAM was expecting a more uplifting 2022
Budget announcement for the construction industry.
For years, Malaysia’s tax base has been quite narrow, Disappointingly, there were no announcement of new
and Budget 2022 is an opportunity to start putting in mega infrastructure projects to pump prime the revival
place measures that will broaden the tax base towards of the Malaysian construction industry.
fiscal consolidation in the next five to ten years.
Datuk Seri Eric Kuan Khian Leng
Benedict Weerasena Master Builders Association Malaysia (MBAM)
Bait Al Amanah (House of Trust) Economist Secretary-general
Source: Budget 2022 Speech – Ministry of Finance Malaysia
28End of Presentation IVAN YEE
Head Of Advisory And Analytics |
27Advisory
ivan@27advisory.com.my
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