Commentary by KPMG in Malaysia: Budget 2021 remains bold and expansionary amidst uncertainty
By Tai Lai Kok, Head of Tax at KPMG in Malaysia
The Honorable Finance Minister’s maiden Budget speech bearing the theme "Stand United, We Shall Prevail” (Teguh Kita, Menang Bersama) is notable as it remains a bold and expansionary one despite the expectation that Malaysia’s economy will contract by as much as 4.5% this year.
Critical areas and sectors are being addressed, fully acknowledging the pain and discomfort of Malaysians, particularly the B40 and the worst affected economic sectors like tourism and travel.
One of the more attractive announcements in moving the country and economy towards to a faster recovery mode is the initiative to encourage the domestic production sector with the allocation of RM300 million towards driving an online trading environment for local manufacturers and traders.
This is good recognition that our traditional methods of doing business are rapidly getting outdated and we risk being left behind in a globalized world where one can purchase virtually anything online. Opening up our goods to the outside world using technology will do wonders to enable our locally made goods to enter markets that were inaccessible in the past.
Another innovative proposal involves the granting of a limited tax deduction to individuals for amounts invested in Equity Crowd Funding ventures. Equity Crowd Funding has been around for a while and it is interesting to see an incentive being introduced to give a boost to this sector. That said, it is to be noted that the Securities Commission Malaysia will be involved in monitoring these Equity Crowd Funding ventures to give some degree of comfort and assurance to investors who may wish to participate.
For further insights on Budget 2021, visit www.kpmg.com.my/Budget2021.
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