How Budget 2022 provides benefits towards Employees in Malaysia?
Budget 2022, which was described as an expansionary budget that will support the people and revive the economy of the country. It saw various measures being introduced to benefit different economic sectors and segments of the society, especially amidst the current challenging financial landscape.
Budget 2022 is the largest budget in Malaysian history and generally did not see any new taxes being proposed or any existing taxes being increased. It is a fit-for-purpose Budget which meets the immediate needs of the country to encourage recovery, growth and investment. It is now key to monitor and measure the implementation of the Budget closely against the desired objectives.Â
As we saw at the beginning of this year, the COVID-19 pandemic has created significant uncertainties and economic conditions may change very rapidly. As such, the Government needs to be agile and prepared to revisit and supplement the Budget measures as and when necessary.  Â
Budget 2022 Malaysia: Tax Relief
Budget 2022 the estimated 1.4 million taxpayers earning RM50,001 to RM70,000, the government will reduce their income tax by 1 percentage point.
The government will raise the tax relief limit from RM6,000 to RM8,000, which covers personal medical expenditure for serious illnesses for one’s spouse and children. The tax relief limit for the scope of health screening will be raised from RM500 to RM1,000. The tax relief limit on expenses for medical treatment, special needs and parental care will also be raised from RM5,000 to RM8,000.
To encourage the public to get preventive vaccinations, the government will expand the scope of tax relief on medical treatment expenses to cover expenses on vaccinations such as pneumococcal, influenza, and Covid-19. Tax exemption under this category will be given at the cost of vaccination for oneself as well as one’s spouse and children, limited to RM1,000.Â
Budget 2022 Malaysia: Financial Commitments
Budget 2022 is dedicating RM28 billion out of the entire RM322.5 billion budget on subsidies. It will be spending RM6.5 billion in cash handouts to 8.1 million people under the rebranded aid programme Bantuan Prihatin Rakyat (BPR) formerly known as Bantuan Rakyat 1Malaysia (BR1M) and also Bantuan Sara Hidup (BSH). This will be up from the previous RM5 billion for 4.3 million individuals under BSH.
Those having trouble repaying their monthly bank loans ― including micro companies taking loans up to RM150,000 and B40 borrowers ― you can opt for a three-month moratorium or to only pay half the amount for six months.
M40 borrowers will find it easier to get the banks’ help in loan repayment as from next month onwards, you only need to declare that your income has been reduced.
To put more cash in Malaysians’ pockets, the Employees’ Provident Fund (EPF) contribution for workers will be cut to 9 per cent (minimum) instead of 11 per cent for one year from next January.
Those made jobless can apply to withdraw RM500 a month from their EPF Account 1 savings or a maximum of RM6,000 spread out over 12 months, starting January 2022.
Malaysians will also be allowed to dip into their EPF Account 2 savings to buy life and critical illnesses insurance for themselves and their families.
Civil servants will get a one-off RM600 aid if they are Grade 56 and below, while a one-off RM300 will be given to government retirees and veterans.
Budget 2022 Malaysia: Subsidies and Rebates
Aside from spending RM1.2 billion to provide quality low-cost housing, the government said first-time home buyers will be exempted from stamp duty until December 31, 2025 on their first home up to RM500,000.
Contractors rescuing abandoned housing projects and their original house buyers are exempt from paying stamp duty until December 31, 2025.
Some 140,000 households can expect an e-rebate of RM200 each to buy made-in-Malaysia energy efficient air conditioners or fridges. The government has set aside RM30 million for this.
This is on top of planned government spending in 2022 to support local products, such as RM25 million (including for the Buy Made in Malaysia programme), RM150 million for the Shop Malaysia Online initiative to encourage online spending, RM150 million to train and give equipment to help 100,000 local entrepreneurs shift their businesses online.
Wage subsidies will be extended for three more months, but targeted at sectors such as tourism and retail and capped at RM600 per month for those earning RM4,000 or less. This is part of the government’s measures to keep existing jobs and generate new job.
Employers will also be receiving financial incentives for hiring the disabled, long-term unemployed, and retrenched workers, or for replacing foreign workers in the construction and plantation sector with local workers.
The Social Security Organisation’s (Socso) allowance for Malaysians looking for new jobs after losing their old ones will be extended to nine months. They can expect to get an allowance at 80 per cent of their last monthly salary in the first month, 50 per cent in the second to the sixth month, and 30 per cent for the last three months. Socso’s employment injury scheme benefits will also be extended to 40,000 delivery riders.
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