What Budget 2022 Means to Malaysian SMEs & Entrepreneurs

 

On 29th October 2021, Minister of Finance Tengku Datuk Seri Zafrul Abdul Aziz has announced the layout of Budget 2022 with the theme “Keluarga Malaysia, Makmur Sejahtera” (A Prosperous Malaysian Family). 

 

The budget totalling RM332.1 billion has overtaken Budget 2021 by RM9.6 billion. This is the largest budget allocation for our nation till date. With 3 areas of focus:


PWC Center Stage: Budget 2022 Snapshot



Here’s what Malaysian entrepreneurs and SMEs can expect from Budget 2022.

Across all industries

Funding & relief for SMEs

Equity investments and quasi-equities have been introduced with an RM2.1 billion allocation to help companies with gearing or leverage issues.

RM14.2 billion is the total amount given to BNM’s SME special funds. Meanwhile, the Targeted Relief & Recovery Facility (TRRF) will receive an additional RM2 billion.

For additional funding for affected companies that are listed on Bursa Exchange, an injection of RM3 billion will be given. RM2 billion will be given to special strategic investment funds to attract foreign multinational investments.

RM25 million will go towards the mission of increasing trade and investments which will explore high-impact investments and new export markets.

There will be a special tax exemption for MSMEs until June 2022.

Under a targeted wage subsidy programme, RM600 million will be used to benefit over 26,000 employers and 330,000 employees.

Support for SMEs

Innovation hubs to spur IR4.0 will receive RM30 million, and this is expected to benefit 10,000 entrepreneurs.

Cradle will get RM20 million to develop the MyStartup strategy which should create 5,000 job opportunities for over 2,500 companies.

Under the Industry 4WRD initiative, RM45 million will go to SMEs and companies in manufacturing and servicing.

Women empowerment

The government is mandating that all publicly-listed companies appoint at least 1 woman to its board of directors.

Meanwhile, RM5 billion will be allocated for the Women Leadership Foundation to encourage female participation in the economic sector.

The Jamin Kerja Keluarga Malaysia incentive is extended to employers who recruit women including single mothers and housewives who have been unemployed for more than 365 days to encourage the women to return to the workforce. 

Bumiputera empowerment

RM11.4 billion has been allocated by the government to continue the Bumiputera empowerment agenda, and to bridge the racial gap in the country.

Non-Bumiputera empowerment

RM200 million will be allocated to the Chinese community to upgrade Chinese villages and enable financing schemes for the community’s SMEs.

RM145 million is provided for the socio-economic empowerment of the Indian community under the Malaysian Indian Transformation Unit (or MITRA) and funding under the Indian Community Entrepreneur Development Scheme (or SPUMI) by TEKUN.

Increasing jobs

For up to 300,00 hires and allocation up to RM2 billion,  incentive of 20% to the first 6 months and 30% to the next 6 months of an employee’s monthly salary will be subsidized to employers who hire those who are not actively working subject to jobs with a salary of RM1,500 and above.

Furthermore, an incentive of 30% to 40% from an employee’s monthly salary from RM1,200 and above will be given to employers who hire targeted groups, for example persons with disabilities (PwDs), Orang Asli and prisoners.

RM1.1 billion will be allocated for training and upskilling programmes to benefit 220,000 trainees, and the individual tax exemption is increased to RM2,000 for expenses incurred in attending upskilling courses.

Under the Jamin Kerja Keluarga Malaysia initiative, RM4.8 billion is allocated to create 600,000 job opportunities.

An additional allocation of RM200 million has also been given to boost high-impact infrastructure development activities through the creation of the Infrastructure Facilitation Fund 3.0 under the supervision of the Public-Private Partnership Unit, Prime Minister’s Office.

The MyStep initiative will continue with a target of 80,000 job placements in the public sector and GLCs to be offered.

Finally, an incentive of RM900 per month (for 6 months) will be given to employers who hire apprentices comprising school leavers and graduates aged between 18 and 30.

Specific industries

Esports industry

RM20 million will be allocated to grow Malaysia’s esports industry. This includes RM5 million to develop a drone sports excellence centre.

Tourism industry

A total of RM1.6 billion has been allocated for the tourism industry, with RM600 million allocated under the Penjana Tourism Financing and BPMB Rehabilitation Scheme.

Meanwhile, RM85 million will go towards a 3-month special assistance for over 20,000 tourism operators.

RM30 million in matching grants will be given for the purpose of the renovation of budget hotels and homestays.

To spur domestic tourism, the RM1,000 tax rebate will be extended until 2022.

Arts & culture industry

RM50 million will be allocated for the arts and culture industry. Specific agencies like the Cultural Economy Development Agency (Cendana), the National Film Development Corporation Malaysia (Finas), and MyCreative Ventures will also receive RM188mil to continue several recovery initiatives.

Retail industry

To rejuvenate the retail industry, the government is allocating RM33 million towards “buy local” shopping campaigns.

The allocation will be channelled to the Buy Malaysian Products Campaign, Mega Sales Programme and the Khazanah Alam Industri direct selling programme.

Aerospace industry

Bumiputera SMEs in the aerospace industry will have RM100 million allocated to business matching grants.

Another RM100 million will go to smart automation matching grants for 200 manufacturing and servicing companies.

Agriculture industry

A total of RM1.7 billion will be allocated to subsidies and incentives for the farming and fishing industries.

Meanwhile, AGRO Bank and BNM will be providing total financing of up to RM1.25 billion for agriculture companies.

There will also be an allocation of matching grants of RM15 million to encourage the RRIM Hydrobest technology adoption among small B40 farmers. RM190 million is allocated for monsoon season aid to help 320,000 smallholder farmers.

 

References:

MOF Budget Touch Points

PWC Centre Stage: Budget 2022 Overview

Vulcan Post

Bernama.com

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