Financial Help For Entrepreneurs & SMEs In Malaysia
Today, the 2021 budget was tabled by the Minister of Finance, Tengku Zafrul Aziz.
“The government expects the economy to recover in 2021 and grow between 6.5% and 7.5%, in line with stimulus plans and the 2021 budget,” he said.
To do this, RM322.5 billion, or 20.6% of our gross domestic product (GDP), will be allocated in the 2021 budget.
This marks an increase from the total government spending allocation for 2020, which has been revised to RM 314.7 billion from the original estimate of RM 297 billion.
The 2021 budget will have 3 main objectives:
- The well-being of people
- Business continuity
- Resilience of the economy
Fund to support entrepreneurship
RM 150 million will be allocated to training and assistance programs for 100,000 entrepreneurs.
RM 150 million will also go to the Shop Malaysia Online initiative and RM 35 million to promote products made in Malaysia.
RM 95 million will be allocated to finance micro-credit for women entrepreneurs.
Meanwhile, RM 4.6 billion will be allocated to empower bumiputera entrepreneurs.
Targeted aid of RM 2 billion will be given to SMEs and tax incentives for certain industries will be extended until 2022.
One billion RM will be allocated to encourage investment in technology, including R&D for electronics and aerospace industries, among others.
Those in the agricultural sector will have a share of RM 60 million for supply chain modernization programs and RM 100 million for high-impact and high-value agriculture and livestock operations.
The government will allocate RM 1.5 billion to extend the wage subsidy program for an additional 3 months, in a targeted manner, especially for those in the tourism sector.
It is estimated that 70,000 employers and 900,000 workers are expected to benefit.
In addition, employers who hire new graduates for apprenticeship programs will receive RM 1,000 per month for 3 months.
Penjana Kerjaya Initiative
Under the Penjana Kerjaya initiative, employers will benefit from an additional 20% bonus to encourage employment opportunities for people with disabilities, long-term unemployed and redundant workers.
For sectors that are heavily dependent on foreign workers such as those in the construction and plantation sectors, a special incentive of 60% of the monthly salary will be provided.
40% of this amount will go directly to employers and 20% to local workers to replace foreign workers.
These incentives will last 6 months.
For employers hiring talent under Penjana Kerjaya, the maximum cost of the training program that can be claimed will be increased from RM 4,000 to RM 7,000 for employees to complete a highly skilled program or vocational certificate program.
Companies that hire senior citizens will benefit from tax exemptions. Meanwhile, companies that hire former convicts and drug addicts will benefit from extended tax exemptions.
Support high-tech and innovative companies
A high-tech fund of RM500 million will be provided by Bank Negara to support high-tech and innovative sector companies.
Support local productions
The RM 1.4 billion National Development Program (NDS) will be allocated to support the implementation of national supply chain development and increase production of local products such as medical equipment.
The Human Resources Development Fund will levy exemptions for businesses in the tourism sector and those still affected by COVID-19 for 6 months. This will take effect on January 1, 2021.
One billion RM will go to a digital transformation program.
RM 150 million in grants will be awarded for the digitization and automation of SMEs.
The government will also allocate nearly RM 1.2 billion for micro-credit programs.
Stimulate crowdfunding in actions
To encourage more individual investors to participate in Equity Crowdfunding (ECF) platforms, an income tax exemption of 50% of the amount invested or limited to RM50,000 will be granted.
RM 30 million will be allocated for a matching grant which will be invested in ECF platforms under the supervision of the Securities Commission.
- You can read more about our coverage of last year’s 2020 budget here.
Featured Image Credit: Tengku Zafrul Aziz, Minister of Finance
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