Budget 2022: Tax reliefs, RPGT Exemption, PTPTN Discounts and 8 other financial incentives

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Let’s take a look at the government incentives which Malaysians can look forward to in 2022. These goodies include tax exemptions and financial aids for families, working professionals, businesses and small-medium enterprises (SME). 

budget-2022-malaysia

© Getty Images

Themed Keluarga Malaysia, Makmur Sejahtera the Budget 2022 has the largest allocation to date – at RM332.1 billion. This amount is 3% higher compared to the monies allocated last year.

Tabled by our Finance Minister Tengku Zafrul, the budget is aimed to boost the recovery for communities and business sectors that were badly impacted by the Covid-19 pandemic. For those who missed the Budget 2022 announcement, here are some of the key highlights that you can look forward to:

1. Vehicle sales tax or SST exemption extended

Originally scheduled to end on 31 December 2020, the SST exemption was first extended to 30 June 2021, and then to 31 December 2021. It has now been extended yet again to 30 June 2022.

  • 100% exemption for locally-assembled (CKD) vehicles
  • 50% for fully-imported (CBU) vehicles

To support the development of the local electric vehicle (EV) industry, a 100% road tax exemption will be given for Electric Vehicles too!

2. EPF contribution rate of 9% will be extended to June 2022

According to the Finance Minister, the Employee Provident Fund will extend the period to reduce the EPF minimum contribution rate from 11% to 9% until June 2022. This initiative which involved an allocation of RM2 billion is to increase money in the hands of the people.

3. Real Property Gains Tax or RPGT exemption

RPGT would no longer be imposed for property disposals by individual citizens, permanent residents and foreigners from the sixth year onwards. This would mean that the RPGT rate for property disposals in the 6th and subsequent years after the acquisition is to be reduced from 5% and 10% to 0%, effective from 1 Jan 2022.

To find out more on RPGT exemptions, check out: RPGT 2021-2022 in Malaysia & How to calculate it?

4. Income tax reliefs 

income-tax-relief

© thamkc | 123rf

Malaysians will get to enjoy the following in the next couple Year of Assessments:

  • extension of the special individual income tax relief of up to RM2,500 on the purchase of mobile phones, computers and tablets until 31 December 2022.
  • expansion of the scope of individual income tax relief for health screening expenses to cover the cost of mental health consulting services of registered psychiatrists, clinical psychologists and counsellors.
  • extension of the individual income tax relief up to RM3,000 for the payment of daycare and kindergarten fees until Year of assessment 2023.
  • Tax relief extension of up to RM4,000 to EPF contributors including voluntary contributions by those who are self-employed in the gig sector.

Additionally, the government announced that:

  • The special individual income tax relief for domestic tourism expenditure up to RM1,000 is extended until the Year Of Assessment 2022.
  • Income tax relief of RM2,500 is given to those who purchase and install electric vehicle charging facilities or utilise rental and hire purchase of facilities, as well as pay subscription fees for EV charging facilities.

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5. Discounts for PTPTN payments

Effective from 1 November 2021 to 31 April 2022, the government will offer a discount of:

  • 15% to those who wish to make a full settlement.
  • 12% to those who want to settle at least 50% of their loan balance in a single payment.
  • 10% to those who make repayment through scheduled salary deduction or debit.

According to PTPTN,  borrowers can apply online to make payment through salary deduction at www.ptptn.gov.my.The discount will be updated in the borrower’s loan account at the end of each month and statements can be reviewed from the seventh day of the following month. PTPTN borrowers who wish to make a full settlement of their loan of at least 50% of the debt balance in one payment must obtain confirmation of the debt balance through PTPTN’s official portal at www.ptptn.gov.my or contact PTPTN marketing executives from Nov 1, onwards.

6. Tax deduction for those who offer rental discounts to tenants is extended

The special tax deduction given to taxpayers who provide a reduction on rental reduction for business premises (SME and other businesses) of at least 30% from the original rental rate will be extended for another six months to June 2022.

7. Incentives for Businesses and SMEs

investment-property-malaysia

© Tatiana-GV/ Getty Images

Semarak Niaga programme

A total of RM40 billion will be allocated under this scheme which includes direct loans, financing guarantees and equity injections, to benefit enterprises of all sizes, from micro-entrepreneurs to public listed companies.

Micro credit schemes

  • RM1.8 billion for micro credit schemes under various agencies such as TEKUN, Agrobank, Bank Simpanan Nasional (BSN), Bank Rakyat and Bank Negara Malaysia (BNM).
  • This includes the Informal and Micro Financing Scheme under TEKUN, which will offer loans of up to RM10,000 at zero interest and a 12-month moratorium.
  • For Micro SMEs, it was also proposed that tax instalment payments be postponed for six months until June 30, 2022.

      RM 2.1 billion funding avenues for entrepreneurs

      In efforts to help companies facing gearing or leverage problems, an RM2.1 billion matching method will be done via equity and quasi-equity investments. The initiative would be spearheaded by SME Bank in collaboration with Bumiputera Agenda Steering Unit (Teraju) and Bank Simpanan BSN, with funds worth RM600 million and it is open to all, especially Bumiputera entrepreneurs.

      Reset Scheme for SMEs

      • Bank Pembangunan Malaysia Bhd (BPMB) would also offer a Reset Scheme (Rehabilitation and Support Through Equity).
      • BNM will also provide a Business Recapitalisation Fund worth RM1 billion for the same purpose.
      • The Targeted Relief and Recovery Facility under BNM has also been increased by RM2 billion.

      8. Incentive for parents

      family with car outside house

      © ferli | 123rf

      Bantuan Keluarga Malaysia

      • Households with a monthly income of less than RM2,500 and have 3 children or more will receive RM2,000.
      • Single-parent households with a monthly income of up to RM5,000 will receive an extra RM500, where the maximum received will be RM2,500.
      • Senior citizen households will receive an extra RM300.

      Subsidy for baby car seat purchases

      This is only applicable for B40 families, where the purchase will be subsidised by 50% or up to RM150.

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      9. Assistance for civil servants

      To show appreciation for the sacrifices made by civil servants in carrying out their duties while the country is facing challenges brought about by the Covid-19 pandemic, a special financial aid of RM700 will be given to 1.3 million civil servants in Grade 56 and below.

      Government pensioners are set to receive a one-off RM350 cash payment too.

      10. RM150 e-wallet credit via eStart programme

      Through eStart, eligible youths aged between 18 and 20 and full-time tertiary students, will receive a one-off transaction of RM150 that will be deposited into their e-wallet account. Details on which e-wallet services will be participating will be updated soon.

      With an allocation of RM300 million, the government hopes that eStart will benefit more than 2 million youths, and encourage the monies to be used for purchasing useful items such as books and learning equipment.

      11. Income tax exemption on e-sports tournaments prize monies

      To recognise the success and achievement of e-sports athletes, the government proposed that the prize money received by individuals in recognised e-sports tournaments be exempted from payment of income tax.

      Check out the 13 financial incentives provided under Budget 2021 last year!

      This article was originally published as Budget 2022: Discounted PTPTN Repayment, RPGT Exemption, Tax Relief & More by Loanstreet.com.my.


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