Human Resources Online
24 February 2023
Malaysia Budget 2023 highlights for employers and HR leaders
Malaysia's Prime Minister and Minister of Finance Datuk Seri Anwar Ibrahim has delivered his 2023 Budget speech in Parliament on 24 February 2023, for a Budget amounting to RM388.1bn this year.
Providing more context, PM Anwar opened his speech by sharing that Malaysia’s Government has currently inherited debts and liabilities of RM1.5tn, or 81% of the country’s GDP. He also touched on the inflation rates.
With this in mind, the Minister introduced several initiatives as part of the 2023 Budget, under Malaysia MADANI.
Among the measures shared, PM Anwar announced that the training fees for gig workers who undergo the micro-credential skills development programmes will be borne by the Government, with a liability of up to RM4,000. At the same time, RM1bn will be allocated to fundings by HRDCorp, in implementing skills training programmes for employees and HRDCorp-registered employers, alongwith accumulated levies.
The Government will also provide an RM50mn matching grant to encourage the automation of the plantation sector through the use of robotics and Artificial Intelligence. This effort seeks to employ skilled local workers.
Next, the Government is looking to create 35,000 job opportunities through jobs placements in Government-related companies, especially for youth, TVET graduates, vulnerable groups, and veterans.
Apart from the above, other highlights include:
Reduction of the tax rate for micro-SMEs (Perusahaan Mikro, Kecil dan Sederhana, or PMKS), from 17% to 15% on taxable income for the first RM150,000 from assessment year 2023.
The Government will also be allocating RM40bn to the provision for loan facilities and financing guarantees for PMKS.
An allocation of RM50mn to build and upgrade 3,000 stalls and kiosks for small traders to do business.
In addition, RM1.7bn will also be used for a loan facility by Bank Negara Malaysia, Bank Simpanan Nasional, and Tabung Ekonomi Kumpulan Usaha Niaga (TEKUN), especially for micro-entrepreneurs, women, youth, small hawkers.
Loan guarantees of up to RM20bn, for SMEs, provided by SJPP (Syarikat Jaminan Pembiayaan Perniagaan).
In preparation for disasters, RM15mn has been provided to Agensi Pengurusan Bencana Negara (National Disaster Management Agency, or NADMA) for asset needs, warning systems, and assistance.
RM50mn has also been provided to Angkatan Tentera Malaysia (Malaysian Armed Forces, or ATM), the Fire and Rescue Department, and Jabatan Sukarelawan Malaysia (RELA) for the provision of equipment and assets.
In an effort to preserve the country's natural treasures, the number of rangers guarding the forest area will be increased to 1,500 people. Aboriginal service, military & police veterans are a priority. A total of RM50mn will be allocated to this.
A "kill switch" policy will be implemented to all banking institutions, to enable each user to take immediate action to freeze their accounts, including preventing the use of ATM cards.
Those who have been declared bankrupt will be entitled to a second chance, PM Anwar shared. This will be through immediate relief for small cases (debt <RM50,000)
Invest Malaysia Council, along with the National Committee on Investment, will lead efforts in speeding up the approval of high potential investment projects.
The Government plans to extend income tax incentives and investment tax allowances until 31 December 2025 for the aerospace sector. This is to further encourage the expansion of existing company capacity and attract more investment.
RM6bn will be used for strategic financing by Bank Pembangunan Malaysia, to promote sustainable and automation agenda.
400 clinics and 380 schools in the less fortunate bracket will benefit from an RM1.2bn repair project that will be completed this year.
The Government will allocate RM725mn towards the implementation of digital connectivity in 47 industrial areas and close to 3,700 schools.
Under the SME & small hawker Digitisation Grant Scheme, a total of RM100mn towards support for business automation and digitisation activities.
Khazanah, DRB-HICOM, and the Employee Provident Fund (Kumpulan Wang Simpanan Pekerja, or KWSP) are among the GLCs that will invest in a number of innovative and high-growth local start-ups.
Monthly assistance and facilities will be provided to employers who employ selected employees who come from financially-strapped backgrounds, be it for the rental or purchase of equipment, or for employment subsidies.
Rahmah Cash Contribution Assistance (STR): this will be given out to households with a total income of below RM2,500 (depending on the number of children). At the same time, an additional contribution of RM600 will be made to the poorest STR recipient households, based on e-Kasih data. Costing a total of RM8bn, the STR is expected to help ease cost-of-living pressures for 8.7mn recipients.
There will be a 2% reduction in the individual resident income tax rate for those earning above RM35,000 and up to RM100,000 a year.
RM102mn will be allocated to the Digital Content Fund to intensify the marketing of local art products, and encourage the production of more creative works
Higher education: Under the National Higher Education Fund Corporation (PTPTN), the Government will implement a refund discount of up to 20% starting 1 March, and for a period of three months. At the same time, the postponement of repayment to borrowers who earn less than RM1,800 will also be implemented for a period of six months.
(Web source: https://www.humanresourcesonline.net/malaysia-budget-2023-highlights-for-employers-and-hr-leaders)