For Budget 2020, Putrajaya has allocated a total of RM292.02 billion, around 5.6 percent lesser than last year. From this, RM241.02 billion is for operational expenditure and RM56 billion for development.
- GST will not be reintroduced
- Corporate income tax rate for SME, 17 percent rate to be applicable for first RM600k increased from RM500k
- Customised incentives for a period of 5 years for Fortune 500 and “global unicorns” in high technology, manufacturing, creative and economic sectors, as well as local companies that would be able to penetrate the world market
- For the E&E industry – income tax exemption for up to 10 years for investment in knowledge based services and special investment tax allowance to encourage E&E companies to reinvest
- ACA to be extended to 2023 for automation of RM2m and RM4m for manufacturing sector and the first RM2m for the services sector
- Companies engaging in ‘Digital Social Responsibility’ (DSR) to upskill future workers with digital skills, will be given tax deductions
- Incentive for venture capital and angel investor to be extended to 2023
- Green tech incentive (GITA/GITE) extended to 2023
- Tax exemption of 70 percent for solar leasing for 10 years
- 10 years incentive for IP generated income (based on modified nexus approach) derived from patents and copyright software
- Deduction for donations to charities, sports, projects of national interest (7 percent individuals; 10 percent companies) extended to include cash wakaf to approved parties and endowment to public universities
- Government allocations, tax incentives and tax deductions to improve tourism infrastructure/industry
- Grants and soft loans available for SMEs, companies for adoption of digitalisation, those undertaking pilot projects on digital applications and Bumiputera entrepreneurs among others
- Special Commissioner of Income Tax and Customs Appeal Tribunal will be merged into Tax Appeal Tribunal (from 2021)
- Incentives under Pre-packaged, PIA and ITA will be reviewed
- Implementation of digital services tax (from Budget 2019), effective 1 January 2020, to include downloaded software, music, video / digital advertising
- RM20 million for Cradle Fund, for training and grants, and RM20 million for e-sports
- RM20 million to MDEC to encourage local players to produce digital content.
- RM50 million for the development of 5G ecosystems and RM25 million for 5G pioneer programmes.
- RM50 million to encourage PPP projects in the special economic zone at the Bukit Kayu Hitam border.
- Minimum wage increased from RM1,100 to RM1,200 / month in main cities (from 2020)
- Employment Act 1955 review to include increasing maternity leave to 90 days from 2021, increasing overtime qualification for those earning up to RM4,000 a month.
- Improve sexual harassment complaint system and strengthen provisions against discrimination in jobs according to race, religion or gender.
- Introduction of Malaysians@Work programme to help four categories of people. Total allocation for the Malaysians@Work programme is RM6.5 bilion for the next five years. The government hopes create 350,000 jobs for Malaysians in five years, and to stop dependency on 130,000 foreign workers. Incentives are courtesy of the EPF.
Women: For women aged between 30 and 50 years, who return to workforce after at least a year will enjoy a RM500 incentive from the government for two years, and RM300 for employers, as well as income tax exemption until 2023.
Local workers: Malaysians replacing foreigners in low-skill jobs to get RM350 or RM500, depending on their sector, every month for two years. Their employers to get RM250 a month during same period.
Graduates: Fresh graduates will be given a RM500 incentive on top of their salaries every month for two years. Their employers will be given RM300 every month throughout the same period.
Apprentices: Extra allowance of RM100 for TVET students. Double tax exemption for companies participating in National Dual Training System for two years. Tax exemptions to companies in Internship programme approved by TalentCorp.
- RM200 million for digital infrastructure development at industrial parks and high impact areas.
- RM250 million to boost internet access in Sabah and Sarawak.
- RM1.1 billion for similar corridors in Perlis, Kuantan, Johor, Sarawak and Sabah.
- RM50 million to improve roads leading to Port Klang.