LIVE UPDATE: Guan Eng tables Budget 2020 in Dewan Rakyat

KUCHING: Finance Minister Lim Guan Eng is currently tabling the much awaited Budget 2020 in the Dewan Rakyat.

Lim began his budget speech at 4.05 pm.

This is the second time that Guan Eng is tabling the country’s annual budget since Pakatan Harapan came to power in May last year.

Among the highlights of the Budget 2020 that have been tabled by the Pakatan Harapan federal government are as follows:

• Government has no intention to reintroduce GST.
• 2020 Budget has four thrusts including boosting economic growth in new economy and digital era, investing in people.
• Government will make available up to RM1 billion in customised packaged investment incentives annually over five years.
• Government has embarked on comprehensive review and revamp of existing incentive framework,  to be ready by Jan 1, 2021, comprising the Promotion of Investment Act 1986, Special Incentive Package and incentives under the Income Act 1967.
• Government has allocated up to RM1 billion worth of customised packaged investment incentives annually over five years to attract targeted Fortune 500 companies and global unicorns in high technology, manufacturing, creative and new economic sectors.
• Government has allocated RM10 million for the International Trade and Industry Ministry to focus on post-approval investment monitoring and realisation.
• Government will provide income tax exemption of up to 10 years to electrical and electronic (E&E) companies investing in selected knowledge-based services.
• Government will provide special Investment Tax Allowance to encourage companies in E&E sector that have exhausted the Reinvestment Allowance to reinvest in Malaysia
• Government eyes making Port Klang a regional maritime centre and cargo logistics hub.
• Broadband prices have been lowered by 49 per cent, triggered a shift in consumer demand for faster internet connections.
• Budget 2020 will have an allocation of RM297 billion – less than the RM314.5 billion allocated for Budget 2019 and a difference of RM17.5 billion. The budget will comprise of an operational expenditure of RM241 billion and a development expenditure of RM56 billion.
• Accelerated Capital Allowance and Automation Equipment Capital Allowance for manufacturing sector on the first RM2 million and RM4 million incurred on qualifying capital expenditure is extended to the assessment year 2023.
• The incentive is also expanded to include the services sector on the first RM2 million incurred on qualifying capital expenditure for assessment years 2020 to 2023.
• Government allocates RM50 million for the repair and maintenance of roads leading to Port Klang
  Transport Ministry to commence feasibility studies on the Serendah-Port Klang Rail Bypass for cargo shipments and the Klang Logistics Corridor — a dedicated privatised highway connecting Northport and Westport, both projects estimated to cost RM8.3 billion.
•  Government allocates additional RM50 million to stimulate public-private partnerships for the Kota Perdana Special Border Economic Zone at Bukit Kayu Hitam​​​​​​​.
• National Fiberisation and Connectivity Plan will adopt public-private partnership approach involving total investment of RM21.6 billion.
• RM210 million earmarked to accelerate deployment of new digital infrastructure for public buildings such as schools, industrial parks.
• Government to introduce a 5G Ecosystem Development Grant worth RM50 million.
• RM250 million will be allocated by the Malaysian Communications and Multimedia Commission to ensure that the interiors of Malaysia, especially rural areas in Sabah and Sarawak, will have access to broadband via satellite technology.
• To boost use of e-wallets, government to offer one-time RM30 digital stimulus to qualified Malaysians aged 18 and above with annual income less than RM100,000.
• New ‘Skim Jaminan Pinjaman Perniagaan’ allocation of RM500 million in guarantee facility will be launched, earmarked for women entrepreneurs.
• RM50 million allocation proposed to encourage SMEs to engage in more export promotion activities.
• Grants amounting to RM445 million proposed to support Bumiputera entrepreneurial development.
• Islamic Economic Blueprint to be formulated to position Malaysia as the centre of excellence for Islamic finance.
• eSports has been given an allocation of RM20 million to develop it further in the nation, in recognition of its high potential.
• Government is concerned by impact of low commodity prices on livelihoods of Malaysians in this sector.
• RM550 million proposed for oil palm replanting loan fund for smallholders.
• RM200 million set aside for ‘Bantuan Musim Tengkujuh’ to eligible rubber smallholders under RISDA, Lembaga Industri Getah Sabah.
• RM100 million allocation for Rubber Production Incentive in 2020 to enhance income of smallhoilders faced with low rubber prices.
• RM1.1 billion allocated to support projects for corridor development activities, including RM50 million for the development of the Chuping Valley Industrial Area in Perlis by NCIA and RM69.5 million for Kuantan Port-related projects by ECERDC.
• Government will provide the necessary infrastructure to construct a Digital Malaysia through a public private partnership, involving an investment of RM21.6 billion, half of which will be financed by the government.
• Malaysian Communications and Multimedia Commission will allocate RM250 million to leverage various technologies, including satellite broadband connectivity.
• RM25 million will be allocated to set up contestable matching grant fund to spur more pilot projects on digital applications such as drone delivery, autonomous vehicle and blockchain technology.
• RM738 million proposed for RISDA and FELCRA to implement income-generating programmes to benefit 400,000 smallholders.
• Government allocates RM20 million to Malaysian Digital Economy Corporation (MDEC) to grow local champions in creating digital content.
• Government will provide 50 per cent matching grants of up to RM5,000 per small-and-medium enterprise (SME) for the digitalisation of their operations such as electronic point of sale systems.
• Government allocates RM550 million to provide Smart Automation matching grants to 1,000 manufacturing and 1,000 services companies to automate their business processes.
• RM70 million allocation for MDEC to set up 14 one-stop Digital Enhancement Centres to facilitate access to financing and capacity building for businesses.
• RM20 million allocation for Cradle Fund to promote early stage innovations.
• Six per cent digital service tax to come into effect starting Jan 1, 2020, affecting services such as Netflix, Spotify, digital software and games distributed on software platforms such as Steam and digital advertising services offered by Google, to name a few.
• Fuel prices (Oct 12-Oct 18): RON97-RM2.67/litre (up seven sen); RON95-RM2.08/litre (unchanged); Diesel-RM2.18/litre (unchanged).
• RM855 million allocation under Skim Baja Padi Kerajaan Persekutuan to raise padi yield.
• R&D in public sector to be intensified with RM524 million allocation to ministries, public agencies.
• RM1.1 billion allocation for Tourism, Arts & Culture Ministry to fulfil Visit Malaysia 2020 aspirations.
• RM10 million allocations for MDEC to train micro-digital entrepreneurs and technologists to leverage on e-Marketplaces and social media platforms to sell their products.
• RM450 million allocations for Khazanah Nasional to implement a digital stimulus to significantly increase the number of Malaysians, merchants and SMEs to use e-wallets.
• RM500 million allocated for Syarikat Jaminan Pembiayaan Perniagaan (SJPP) in guarantee facility earmarked for women entrepreneurs.
• RM200 million funds specifically for women entrepreneurs, offering loans up to RM1 million per SME.
• RM300 million funds to support Bumiputera SMEs with the potential to become regional champions, with priority to producers of halal products and manufacturers with high local content.
• Government to contribute RM100 million towards construction of new cable car system to Penang Hill.
• RM10 million allocations for Ministry of Entrepreneur Development to focus on advocacy and awareness for halal certification, halal product development and providing platforms for local players to tap on the US$3 trillion global halal market.
• Market Development Grant’s ceiling per company raised to RM300,000 yearly from RM200,000.
• Government raises the ceiling for the participation in each export fair to RM25,000 from RM15,000.
• RM50 million allocated to encourage SMEs to engage in more export promotion activities.
• Government allocates additional RM50 million to My Co-Investment Fund under the Securities Commission Malaysia to help finance underserved SMEs.
• Government to launch Malaysians@Work initiative aimed at creating better employment opportunities for youth and women, reducing over-dependence on low-skilled foreign workers.
• Malaysians@Work initiative to cost some RM6.5 billion over five years with creation of additional 350,000 jobs for Malaysians.
• Government proposes to increase minimum wage rate only in major cities to RM1,200 per month effective 2020.
• Education Ministry to receive largest allocation of RM64.1 billion in 2020 from RM60.2 billion in 2019.
• RM735 million proposed for school maintenance and upgrading works.
• RM5.9 billion set aside in 2020 for TVET from RM5.7 billion in 2019.
• Government to provide RM1 billion 1:5 matching guarantee for dedicated private equity funds to invest in Malaysian consortiums to catalyse more construction consortiums bidding for projects and concessions overseas.
• RM150 million for overall entrepreneurship development and upskilling by Perbadanan Usahawan Nasional Bhd.
• RM75 million by SME Corporation for capacity building and export for Bumiputera SMEs.
• RM170 million in total for access of financing via TEKUN, SME Bank and Pelaburan Hartanah Bhd.
• RM50 million for entrepreneurship under Unit Peneraju Agenda Bumiputera, Ministry of Economic Affairs.
•  RM1.3 billion proposed for education institutions under MARA, a further RM2 billion for student loans benefitting 50,000 students.
• RM10.9 billion allocated for rural development projects from RM9.7 billion in 2019.
• RM587 million allocation for rural water projects, of which RM470 million for Sabah and Sarawak.
• Government to support projects through financing programmes under Bank Pembangunan Malaysia Bhd, offering two per cent interest subsidy per annum via Maritime and Logistics Fund (RM1 billion) and RM2 billion Industry Digitalisation Transformation Fund.
• Industry Digitalisation Transformation Fund to also support implementation of connectivity projects.
• Sustainable Development Financing Fund size increased to RM2 billion from RM1 billion.
• Government allocates RM100 million for small business loans under the Chinese SMEs Financing Programme via Bank Simpanan Nasional and RM20 million under TEKUN Nasional’s Indian Community Entrepreneur Development Scheme, both at an interest rate of four per cent.
• Government to spend RM500 million on rural electrification benefiting more than 30,000 rural households, majority in Sabah and Sarawak.
• RM1 billion set aside for rural roads throughout Malaysia, primarily targeted at Sabah and Sarawak.
• Allocation for the Agriculture Ministry increases to RM4.9 billion in 2020 from RM4.4 billion in 2019, with special focus towards enhancing incomes of farmers.
• Government proposes to increase fishermen allowance from RM200 to RM250 per month in 2020, with a total allocation of RM152 million.
• Government to allocate RM30 million for the production of glutinous rice in Langkawi.
• Sabah and Sarawak to receive largest portion of development expenditure of RM5.2 billion and RM4.4 billion, respectively.
• Government allocates RM1 bln in investment incentives to attract Fortune 500 companies and global unicorns.
• Government to channel RM24.2 billion for subsidies and social assistance, from RM22.3 billion in 2019.
• To strengthen the development of the finance ecosystem, Bank Negara Malaysia is proposing a two-phase restructuring plan to form a new financial institution through the merger of Bank Pembangunan Malaysia, Danajamin Nasional, SME Bank and the Export-Import Bank of Malaysia.
• A Special Committee on Islamic Finance will be established to formulate the Islamic Economic Blueprint and organise outreach initiatives and professional courses to promote deeper understanding of Islamic Finance nationwide.
• The current tax deductions on the cost of issuance and additional deductions on sukuk issuance costs under the Wakalah principle will be extended for five years until assessment year 2025.
• Tax exemption for fund management companies managing Shariah compliant funds and Sustainable and Responsible Investment (SRI) funds, and the tax deduction on the cost of SRI Sukuk issuance will be extended for another three years until assessment year 2023.
• Green Investment Tax Allowance and Green Income Tax Exemption incentives will be extended to 2023, and a 70 per cent tax exemption of up to 10 years will be given to companies undertaking solar leasing activities.
• RM5 billion allocated for Bantuan Sara Hidup, scheme expanded to cover 1.1 million single individuals aged above 40 earning less than RM2,000 per month.
• RM575 million proposed for socio-economic assistance to senior citizens benefiting 137,000 seniors whose household income is below poverty level.
• A financial allocation from the federal government amounting to RM1.3 billion and RM1.14 billion will be given to Sarawak and Sabah, respectively. Sarawak will also get an increased special grant of RM32 million, while Sabah will get RM53.4 million. The grants will be doubled in the next five years, resulting in RM64 million for Sarawak and RM106.8 million for Sabah. The special grants fall under Article 112D of the Federal Constitution and have not been reviewed since 1969.
• RM83 million set aside for overall economic development, education and infrastructure for Orang Asli besides RM57 million for welfare, assistance.
• Government to allocate a RM550 million oil palm replanting loan fund for smallholders and collateral-free at an interest rate of two per cent per annum, with a tenure of 12 years, including a four-year moratorium on repayment.
• Government will allocate RM27 million to support the Malaysian Palm Oil Board’s efforts to market palm internationally and counter anti-palm oil campaigns.
• Government will enhance implementation of B20 for the transport sector by end-2020 and increase palm oil demand by 500,000 tonnes per annum.
• The government will allocate RM200 million as Monsoon Season Aid to eligible rubber smallholders under RISDA and the Sabah Rubber Industry Board.
• Government will provide RM100 million as rubber production incentive in 2020 to enhance the income of smallholders faced with low rubber prices.
• RM100 million grant proposed for Malaysian Indian Transformation Unit (MITRA) of which 80 pct will be programme-based.
• RM8 billion set aside to assist Bumiputera institutions and entrepreneurs.
• Government will continue to ensure at least 30 per cent of tenders of each ministry are reserved for only Bumiputera contractors.
• Allocation for Islamic affairs under Prime Minister’s Department increased to RM1.3 billion from RM1.2 billion in 2019.
• Allowance for KAFA teachers increased by RM100 a month, to benefit 33,200 existing teachers.
• One-off special bonus of RM500 proposed for each imam, bilal, mosque caretakers and takmir teachers.
• Health Ministry to get RM30.6 billion compared to RM28.7 billion under 2019 Budget.
• RM1.6 billion to be spent on building new hospitals, upgrading and expansion of existing ones.
• The government will allocate RM810 million for the welfare of the FELDA community.
• Govenment will provide RM738 million for RISDA and Federal Land Consolidation and Rehabilitation Authority to implement various income-generating programmes to benefit more than 300,000 RISDA and 100,000 FELCRA smallholders.
• The government will increase allocation to the Agriculture Ministry to RM4.9 billion in 2020 from RM4.4 billion in 2019 with a special focus towards enhancing income of farmers.
• The government will allocate RM524 million to Ministries and Public Agencies to enhance Malaysia’s research and development (R&D) framework.
• Government will allocate RM30 million for R&D matching grants for collaborations with industry and academia to develop higher value added downstream uses of palm oil, specifically tocotrienol in pharmaceuticals and bio-jet fuel.
• Government invites public private partnership proposals for the plan to upgrade Sultan Azlan Shah Airport in Ipoh.
• The Cabinet will consider all proposals, including those from Khazanah Nasional to acquire or dispose all shares of Plus Malaysia Bhd.
• There will be 18 per cent discount in average toll charges across PLUS highways.
• RM10 billion allocation for Rent to Own financing scheme by financial institutions with the support from the government via a 30 per cent guarantee.
• Under MySalam social protection scheme, those diagnosed with critical illness this year to receive RM8,000 cash payout.
• Takaful coverage under MySalam to cover 45 illnesses from existing 36, including polio and terminal illness.
• Government to lower threshold on high rise property prices in urban areas for foreign ownership to RM600,000 from RM1 million.
• Government will extend the Youth Housing Scheme administered by Bank Simpanan Nasional from Jan 1, 2020 to Dec 31, 2021.
• Youth Housing Scheme to offer 10 per cent loan guarantee through Cagamas to enable full financing borrowers and RM200 monthly instalment assistance for the first two years for 10,000 home units.
• The government will enhance the Real Property Gains Tax treatment by revising the base year for asset acquisition at Jan 1, 2013 for assets acquired before Jan 1, 2013 compared with the previous base year of Jan 1, 2000.
• Government records fiscal deficit of 3.7 per cent of GDP in 2018 and on track to achieve targeted deficit of 3.4 per cent in 2019.
• RM450 million proposed to acquire up to 500 electric buses for public transport in selected cities nationwide.
• To help ease congestion at Causeway and 2nd Link, RM85 million investment proposed to enhance vehicle, traffic flow through CIQ.
• Government announces RM500 special payment for civil servants Grade 56 and below.
• Govt retirees to get special payment of RM250, also extended to non-pensionable veterans.
• Government expect fiscal deficit to be at 3.2 per cent in 2020 and to reduce further on average at 2.8 per cent of GDP over the medium term.
• The 2020 Budget will allocate a total expenditure of RM297 billion, excluding RM2 billion reserved for contingencies, compared with RM277.5 billion in 2019.
• The 2020 Budget comprises operating expenditure of RM241 billion and development expenditure of RM56 billion.
• Government expects to collect RM244.5 billion in revenue in 2020, an increase of RM11.2 billion from 2019, after excluding the one-off Petronas dividend of RM30 billion.
• Government proposes to introduce a new band for taxable income in excess of RM2 million, to be taxed at 30 per cent, which is a two percentage point increase from the current rate of 28 per cent.
• Government to allocate RM11 million towards initiatives by Education Ministry in collaboration with MESTECC to inculcate the Science, Technology and Innovation (STI) culture.
• Government to continue to allocate 50 per cent of tourism tax to respective state governments to support their efforts in conjunction with Visit Malaysia 2020. ​​​​​​
• RM1.1 billion allocation for Tourism, Arts & Culture Ministry to fulfil Visit Malaysia 2020 aspirations​​​​​​.
  Government to launch Malaysians@Work initiative aimed at creating better employment opportunities for youth and women, reducing over-dependence on low-skilled foreign workers.
• Graduate@Work programme to hire graduates who have been unemployed for more than 12 months. The graduates who secures work will receive a wage incentive of RM500 per month, for a duration of two years.
• 14,400 personnel of Fire and Rescue Dept to receive RM200 special allowance a month.
• One-off RM500 payment proposed to 70,000 holders of Pingat Jasa Malaysia.
• To further support SMEs growth, the SMEs’ chargeable income (which are subjected to 17 per cent income tax rate) will be increased to RM600,000, provided that the SMEs have a paid up capital of less than RM2.5 million and annual sales less than RM50 million.
• Government will merge the Special Commissioner of Income tax and the Customs Appeal Tribunal to form the Tax Appeal Tribunal.
• Government expects to generate RM3 billion revenue from assets disposal via competitive bidding process.
• Bandar Malaysia Project will include a People’s Park, additional 5,000 units of affordable houses and will have greater Bumiputera participation throughout the project. Proceeds from the project will be utilised to reduce 1MDB debts.
• RELA personnel to enjoy higher allowance of RM2 per hour from January 1, 2020.
• Women@Work programme to create 33,000 job opportunities per year for women aged 30-50 years old who have stopped working for a year or more. Wage incentive for returning women workers is RM500 per month for two years.
• Wage incentive for Malaysians hired to replace foreign workers under the Local@Work programme is either at RM350 or RM500 per month, depending on the sectors, for two years.
• Malaysia@Work initiative to cost RM6.5 billion over five years and create an additional 350,000 jobs for Malaysians and reduce foreign workers dependency by more than 130,000.
• To ease the financial burden of parents who enrol their children in registered nurseries and kindergartens, individual tax relief for fees paid to be increased from RM1,000 to RM2,000.
• Government to review the Employment Act 1955 in order to increase maternity leave from 60 days to 90 days effective 2021.
• Government to review the Employment Act 1955 in order to extend the eligibility to overtime from those earning less RM2,000 to those earning less than RM4,000 per month.
• COLA allowance to be increased by RM50 per month beginning 2020 for support group.
• The government reopened registration for Grade 1 (G1) Bumiputera contractors beginning Sept 1 to participate in government procurement and they get to bid for government jobs worth RM1.3 billion.
• Gross domestic product expected to grow by 4.7 per cent this year and 4.8 per cent in 2020.
• Inflation is expected to remain well anchored at two per cent in 2020.
• Civil servants with at least 15 years of service will be allowed early redemption of Accumulated Leave for up to 75 days as replacement pay.
• RM50 million proposed to enhance detention procedures, facilities in response to custodial deaths and alleged mistreatment of suspects.
•  Installation of 11,500 CCTVs proposed in police detention centres, immigration entry points.
• Funding for toll acquisition will be determined later – PM.
• Government eyes establishing Malaysian Ombudsman to replace Bureau of Public Complaints to enhance governance, government delivery systems.
• Additional 100 personnel proposed for Malaysian Anti-Corruption Commission.

After the national budget has been tabled, it will be debated at policy level by the MPs before being taken to the committee level and passed by the Dewan Rakyat.