Webinar highlights Budget 2021
UTAR Centre for Accounting, Banking and Finance (CABF), in collaboration with Faculty of Business and Finance (FBF) and Centre for Corporate and Community Development (CCCD) organised a webinar titled “2021 Budget Talk” via Zoom on 10 December 2020.
The webinar was moderated by CABF Chairperson Asst Prof Dr Nurul Afidah binti Mohamad Yusof. The invited speakers were Asst Prof Dr Tan Swee Kiow and Specialist I Wong Tai Seng from the Department of Commerce & Accountancy, Faculty of Business and Finance. The webinar was first started by Dr Tan’s presentation on the Budget 2021. She mentioned that this was the 1st budget tabled by the Perikatan Nasional (PN) Government on 6 November 2020. Themed “Resilient as one, together we triumph”, the budget focuses on three integral goals, namely Rakyat’s wellbeing; Business Continuity; and Economic Resilience.
“The government allocates RM322.54 billion for Budget 2021. From the amount allocated, the majority of government revenue collection comes from income tax, which is 40.9% consisting of individual, companies, petroleum, withholding, cooperative and others. It also comes from indirect tax (13.2%) and non-tax revenue (19.4%),” she said. She added that the sum of the three components (income tax, indirect tax and non-tax revenue) was less than the budget allocated, therefore the government took back the borrowings and use of government’s assets for the deficit of RM84.84 billion.
She further explained how the government allocated the amount and shared some highlights from the planned budget. “To appreciate MOH front liners effort in fighting the Covid19 pandemic, the government provides them with a one-off payment of RM500; as for other front liners, for example—police, they will be given RM300. Government servants will also get a one-off RM600 aid; while pensioners and veterans will get a one-off RM300 aid. For new graduates who have the intention to further study, they can apply an RM3,000 voucher for enrolling professional courses in the approved local university or private college,” she said.
She continued, “Due to the pandemic, some companies are experiencing difficulties and losses, especially those from the tourism and retail sectors. The government provides them with a targeted wage subsidy. Employees who are working in these sectors with a salary not more than RM4,000 will be given a subsidy RM600 per month. However, it is up to 500 employees for a company.” Besides, she also gave a brief introduction on ‘MyStep’, a short-term employment programme which will be given an allocation of RM700 million offering 50,000 contract-based jobs in the public sector and government-linked corporations.
Moreover, Dr Tan talked about the personal incentive for B40 group, Batuan Prihatin Rakyat (BPR), as well as the initiatives taken for senior citizens, disabled and home volunteers. She also noted that the government was committed to supporting farmers and fishermen to remain resilient by providing them with assistance such as living allowance and incentives. “Up to now, the total population of Malaysia is about 32.73 million. Of the total population, 15.84 million are female which is 48.4%. Almost half the population are female. The government appreciates their contribution. They provide financial assistance and support to women to encourage them to move further,” she said. Besides, she pointed out the government’s emphasis on providing quality education as well as enhancing public transport and rural infrastructure. She also talked about Employees Provident Fund (EPF) as well as the budget measures to assist individuals and Small and medium-sized enterprises (SMEs) affected by Covid19.
Wong, on the other hand, discussed the tax changes for the Budget 2021 in the context of companies and individuals. He talked about some highlights in the budget such as tax rebate for companies and limited liability partnerships, drop in the individual tax rate, and exemption on compensation for loss of employment. He also discussed the resident individual income tax relief for expenses such as childcare fees, study fees and lifestyle expenses.
He said the government proposed that the income tax relief on Private Retirement Scheme (PRS), which was supposed to end in 2021, extended for another four years. He also said the government increased the tax relief for the disabled spouse from RM3,500 to RM5,000; they also expanded the tax relief for medical treatment, special needs and parental care from RM5,000 to RM8,000; and increased the limit of tax relief for treatment of serious illness from RM6,000 to RM8,000. “Under this category, individuals can claim up to RM1,000 to cover vaccinations to guard against infections such as Covid-19,” he explained, adding that the RM8,000 limit was also inclusive of any claims made under complete medical examination.
“As I said just now, you can claim complete medical examination up to RM1,000 starting from the year 2021. However, a lot of people fail to claim the relief when they go for a medical check-up. So please make sure you fulfil all the conditions defined by the Malaysian Medical Council (MMC),” he said. He also talked about the imposition of excise duty on electronic cigarette and disposal of residential property.