Tax Relief & Financial Help For Students, Veterans, & B40
The 2021 budget is generally expected to be one of the largest, as it contains many measures aimed at helping ordinary Malaysians and boosting economic recovery amid the Covid-19 pandemic.
Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz expects the economy to recover in 2021 and grow 6.5% to 7.5%, in line with stimulus plans and the 2021 budget.
Here are some initiatives that would directly benefit citizens.
1. Help for the B40 Group
Extension of the MySalam and Perlindungan Tenang voucher program for the B40.
RM 1.5 billion will be allocated to provide Internet connectivity for the B40 group in the form of a credit of RM 180 per person. This will benefit 8 million people.
2. RM50 e-wallet credit for young people
The government will set up an eYouth program (eBelia program) which will credit a one-off amount of RM50 to ewallet accounts for people aged 18-20.
Its allocation of RM75 million is expected to benefit 1.5 million young people.
3. Civil servants will receive special financial assistance
Special financial assistance worth 600 RM will be granted to officials of grade 56 and below.
For retirees and veterans without a pension, special financial assistance of RM300 will be granted.
Both grants will be paid at the start of 2021.
4. BPN2.0 payments in 2021
The Bantuan Sara Hidup (BSH), also known as BPN, was introduced to reduce the cash flow burden on citizens affected by the COVID-19 pandemic.
In January 2021, BPN2.0 phase two payments totaling RM 2.2 billion will be channeled.
This comes after channeling their RM 2.1 billion payout to 10.6 million beneficiaries in 2020.
In addition, BSH will be renewed as Bantuan Prihatin Rakyat (BPR) with more assistance:
- Household income below RM 2,500 with one child will receive RM 1,200; those with two or more children will receive RM 1,800.
- Household income between RM2,501 and RM4,000 with one child will receive RM800; those with two or more children will receive RM 1,200.
- Household income between RM 4,000 and RM 5,001 with one child will receive RM 500; those with two or more children will receive RM750.
- Singles with an income below RM 2,500 will receive RM 350.
With BPR allocation of RM 6.5 billion, it is expected to benefit 8.1 million people.
5. Tax relief
1% tax cut
For those earning between RM50,001 and RM70,000, the income tax will be reduced by 1%. It should benefit 1.4 million taxpayers.
Those who have lost their jobs and receive compensation paid, the income tax exemption ceiling will drop from RM 10,000 to RM 20,000 for each year of service completed.
This will be imposed for a two-year evaluation period.
Health-related tax exemptions
The ceiling for tax relief on personal, spousal and child medical treatment for critical illness will be increased from RM6,000 to RM8,000.
For full medical examinations, the tax relief will increase from RM500 to RM1000.
Tax breaks for the cost of medical treatment, special needs and parental care have also been increased from RM 5,000 to RM 8,000.
A tax exemption for disabled couples will be increased from RM 3,500 to RM 5,000.
Tax relief for parents to save for their children’s future
Tax relief of up to RM 8,000 for the National Education Savings Plan (SSPN) will be implemented to encourage parents to save for their children’s school fees.
This will be carried out until the assessment year 2022.
Lifestyle tax relief
The limit of the lifestyle tax break has been increased from RM 2,500 to RM 3,000.
It will cover sports-related expenses, including the cost of participating in sports competitions.
The scope of this relief has also been extended to include a subscription to online news sites.
- You can read more about our 2020 budget coverage here.
Featured Image Credit: Tengku Zafrul Aziz, Minister of Finance
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