Budget 2022: Here’s What You Wanted, And Here’s What You Got
Budget 2022 has just been tabled.
After almost two years of dealing with the pandemic – and its economic fallouts – many of us have been hoping for more government support in this year’s Budget.
Recently, we asked you what you wanted to see in Budget 2022. Around 100 of you voted on the measures you’d like to see, and eight of you wrote in to tell us your views and suggestions.
So, did Budget 2022 give you what you wanted?
Here’s what we got
More cash handouts
The previous Budget announced a few cash handouts to the B40 and M40 groups through Bantuan Prihatin Rakyat. This year, cash handouts are back again under Bantuan Keluarga Malaysia (BKM). Under BKM, households earning less than RM2,000 or have three or more children are eligible to receive RM2,000. That’s an increase from last year’s highest possible handout of RM1,800.
There is also financial aid for other households with incomes below RM5,000, as well as for single parents and the elderly.
Higher tax reliefs for education, medical expenses and insurance premiums
Okay, this one’s a mixed bag. We didn’t get any new tax reliefs for insurance premiums, and we didn’t actually get more tax relief for medical expenses.
However, Budget 2022 has proposed to expand the current medical tax relief category to include expenses involving registered psychiatric services, clinical psychologists and counselors.
In addition, you will be able to claim up to RM2,000 in tax relief (an increase from RM1,000) on upskilling or self-improvement courses until 2023. You can also claim up to RM7,000 in tuition fees for any course under a registered professional institution.
Higher income tax reliefs for lifestyle and tourism expenses
We didn’t exactly get more tax relief for these categories, but we did get an extension for them. Budget 2022 has announced that the RM2,500 tax relief for the purchase of smartphones, computers and tablets will be extended to December 2022. The RM1,000 tax relief for domestic travel will also be extended to 2022.
Under Budget 2022, the Real Property Gains Tax (RPGT), which are taxes on the profit you make from selling a property, will no longer be imposed for properties sold on the sixth year onwards. However, there will be no reduction in RPGT for properties sold earlier than that.
And here’s what we didn’t get
Personal income tax reduction for those affected by COVID-19
The National House Buyers Association’s (HBA) secretary-general had said that he hoped the government would reduce the income tax for individuals affected by Covid-19 – and many of you agreed.
However, there was no personal income tax reduction. On the contrary, Budget 2022 announced an expansion of the tax base. This included sales taxes on low-value goods entering the country by air courier, services taxes on delivery services and ecommerce, as well as income taxes on income originating from outside the country.
Extension of HOC benefits to 2022 and subsale properties
Property developer Mah Sing had proposed to extend the Home Ownership Campaign (HOC) to next year, while PropertyGuru had suggested that it should cover subsale properties. The HOC, which offers benefits like a 10% house discount for participating projects and stamp duty exemptions, makes home ownership more affordable for first-time home buyers. However, there was no mention of the HOC in Budget 2022.
100% financing for first-time home buyers
Many of you also wanted 100% financing for first-time home buyers. However, while the government has announced an RM2 billion scheme to help those without steady incomes to purchase a home, as well as RM1.5 billion to continue low-cost housing projects, Budget 2022 did not announce that it would allow 100% financing.
Zero-interest loan moratoriums to SMEs
According to the Entrepreneur Development and Cooperatives (Medac), the first Movement Control Order (MCO) last year affected 72% of business operations, while this year’s MCO affected 35%.
Many of you said that you wanted zero-loan moratoriums for SMEs. While moratoriums weren’t announced, the government did announce RM40 billion in funding programmes for entrepreneurs, including interest-free grants up to RM10,000 from TEKUN Nasional, an entrepreneur development institution.
Financial relief packages for affected industries (tourism, aviation, manufacturing, etc.)
While the pandemic has been challenging for many businesses, some industries have been hit particularly hard. Many of you – as well as beleaguered aviation industry players – wanted to see targeted financial relief packages, but there was no mention of them in Budget 2022.
Get caught up on Budget 2022
While we didn’t get a lot of the measures we’ve voted for, next year’s Budget is still set to be Malaysia’s largest budget ever, and it’s expected to spur economic recovery and job creation. And after two years of gloom and doom, could it be time for a silver lining to finally appear? Let us know what you thought about the Budget, and if the government has missed out on any key measures. If you need to catch up on all the updates instead, just read the key highlights in our infographic here.