Recently, on the 10th October, 2019, the Minister of Finance, YB Lim Guan Eng has tabled a national budget in the Parliament. This time its theme is “Shared prosperity: Sustainable and inclusive growth towards high income economy”
Many people had spoken and commented about it.
If you are Business Owners and Entrepreneurs, more reasons for you to know and care about the 2020 Budget. Allow me to share the 10 reasons as below:-
- Business Opportunities
The Ministry of Education was the biggest recipient of the 2020 Budget with an allocation of RM64.1 billion with an increase of RM3.9 billion compared to the current allocation. It was announced during the 2020 Budget, that a sum of RM735 million will be allocated for the maintenance and upgrading of schools.
The 2020 Budget demonstrates that the local technology industry is continuing to get much attention from the government, which is intent on further boosting the capabilities of local SMEs and start-ups, strengthening digital content, embracing digitisation, enhancing e-commerce, and adopting 5G technology.
Thus, if you are running a contractor business or doing business in digital economy, you can plan and participate in the tender project and grab the business opportunity.
- Government grant & Incentives
The Finance Minister, YB Lim Guan Eng, has announced that RM10 million will be budgeted for the Malaysian Digital Economy Corporation (MDEC) to equip micro-digital entrepreneurs and technology experts in an effort to further improve e-Marketplaces and social media platforms. A majority of micro-digital entrepreneurs in Malaysia, according to Lim, are made up of women and youths—a reported 100 of these entrepreneurs have managed to achieve a revenue of RM23 million in total, over a span of 6 months.
In this regard, the Entrepreneurs can take the opportunities and grab the grant or incentives by participating and take active action in the relevant sector of business.
- Corporate Tax & Individual Tax Rate
Over the years, Malaysia has seen a gradual reduction in corporate income tax rate from 40% (following the enactment of the Income Tax Act in 1967) to the present rate of 24%.
In the recent Budget 2020, the government had maintained the corporate income tax rate for small and medium enterprises (SMEs – as defined for tax purposes) i.e. 17% on the first RM500,000 of chargeable income.
Despite budget constraints, the government stood its ground by not introducing any form of new taxes. Instead, the existing tax base is widened by taxing the rich where the personal income tax rate is proposed to be increased by 2% to 30% for those earning chargeable income of more than RM2 million per year. Non-resident individuals will be taxed at a flat rate of 30%, an increase of 2% from 28%.
As a businessman, if your personal tax rate falls under this bracket then, you might need to consult your tax agent for their views.
Grants are non-repayable funds or products disbursed or given by one party, often a government department, corporation, foundation or trust, to a recipient, often a nonprofit entity, educational institution, business or an individual. Often, grant is an alternative fund besides financing.
In the recent 2020 Budget , the government had suggested Smart Automation matching grant of RM550 million to 1,000 manufacturing and 1,000 services companies to automate business processes.
As a business owner and entrepreneur, one should really grab this opportunity as it provides some form of funding and ease the financial burden to the business.
Notwithstanding to whatever available potential business, all business owners and entrepreneur need to undertake and doing the business diligently and ensure comply with the rules and regulations including registration the business entity.
What is your view on the recent 2020 Budget? Please share you view with us.
Should you have any business queries on our services, please let us know. You can contact us at :-
CSQ Corporate Services Sdn Bhd.
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Taman Hillview 68000 Ampang,
Selangor Darul Ehsan.
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