Budget 2021 is an expansionary document for extraordinary times. “It does not just provide support to businesses, workers and households in this current fragile economic situation, but also drives continued focus on digital transformation and upskilling of workers for the future,” said MIA President Dr. Veerinderjeet Singh in an initial response to the Budget.
Given the size of the Budget, good governance and monitoring will be vital to prevent leakages and mismanagement. “This is the largest Budget in Malaysia’s history, with an estimated deficit of 6 percent as opposed to the previous budgetary deficit target of 3.2 percent. MIA hopes that there will be an emphasis on budgetary governance to ensure that the spending is prudent, without wastage and achieves the desired outcomes,” stressed Dr. Veerinderjeet.
“We must monitor the projects well and ensure that the outcomes are in line with the desired targets, especially long-term reforms for sustainability as envisioned in the Budget. This is where the accountancy profession, especially accountants in the public sector can provide support to ensure accountability and transparency,” continued Dr. Veerinderjeet, who proposed that the Government issue “an annual report card on how the money is spent.”
“The measures outlined in Budget 2021 are clearly meant to stimulate the economy, enhance social and health safety nets, protect business continuity and drive long-term sustainable development reforms. In line with our nation building purpose, MIA is ready to deploy its expertise to support the implementation of the Budget proposals. We look forward to contributing especially in areas relating to business continuity, sustainability planning, digital transformation, as well as upskilling through professional development and education, among others,” said MIA CEO Dr. Nurmazilah Dato’ Mahzan.
As the regulator and developer of the accountancy profession, MIA will be looking for opportunities to collaborate strategically with its stakeholders in accordance with the theme of the Budget 2021 – Stand United, We Shall Prevail. MIA will be able to add value in the following areas:
Education and Upskilling for Higher Value Jobs
MIA emphasises tremendously on upskilling of accountancy graduates via professional programmes to prepare them for the employment market. This will be facilitated by the Government’s allocation of RM1 billion in total for reskilling and upskilling programmes, including:
- RM150 million allocated for KPT-PACE reskilling and upskilling programmes, whereby a voucher for an amount up to RM3000 will be allocated for 50,000 graduates to pursue professional programmes at Public and Private Institutions of Higher Learning.
- RM6.5 billion for quality education at MARA Learning Institutions and UiTM for TVET Digitalised Learning.
- Personal relief for education fees extended to expenses for upskilling courses organised by Professional Bodies up to RM1,000 per year of assessment.
Incentives for Capacity Building
MIA welcomes capacity building programmes and incentives to build resilience and relevance of organisations and talent pipelines and to improve social and economic equitability among different segments of society. Highlights include:
- Allocation of RM1.3 billion for various capacity building programmes inclusive of professional development, “Dana Kemakmuran Bumiputera” and other programmes or projects related to upskilling of Bumiputeras.
- Allocation of RM1,000 per month for three months for private sector employers who hire fresh graduates for apprenticeship programmes, which will be instrumental in developing talent to support capacity and competency building.
Personal Reliefs, Support for Household Wellbeing
The following reliefs and incentives will be highly relevant for individuals:
- Personal income tax rate will be reduced by 1 percent for individuals having chargeable income ranging from RM50,001 and RM70,000. This is expected to benefit 1.4 million taxpayers.
- The employees’ Employees Provident Fund contribution rate will be reduced to 9 percent beginning 1 January 2021 for a 12-month period to increase disposable income.
- The RM3,000 tax relief for contributions to private retirement saving funds (PRS) will be extended until 2025. This was supposed to be a 10-year scheme ending 2021.
Digital transformation especially for smaller-sized organisations will be critical to ensuring their business continuity in an environment of digital disruption. The following measures are welcomed to support digital transformation:
- Government through BPMB will implement “Skim Transformasi Pendigitalan Industri” amounting to RM1 billion for accelerating digitalisation activities until 31 December 2023.
- Additional fund of RM150 million will be allocated under “Skim Geran Pendigitalan SME dan Geran Automasi” to support automation and modernisation activities. The conditions have been relaxed to include SME – Micro and companies which have commenced their business operations for 6 months.
Incentives and Reliefs Benefiting the SMEs and SMPs
To support business continuity especially SMEs and SMPs (including Accountants), Budget measures to bridge financing will be critical:
- Access to finance for SMEs through alternative funding platforms such as P2P / Equity Crowd Funding (ECF)
- Individual investors who participate in financing through ECF platform will be given 50 percent income tax exemption from the amount of investment limited to RM50,000
- Micro credit through Scheme Lestari Bumi from BSN, Micro Enterprise Facility by BNM and other micro credit schemes
- RM95 million allocated to microcredit financing for women entrepreneurs to promote their development and inclusivity and enhance their contribution to the economy
- Increase of the guarantee provided under SJPP by RM10 billion
“We will be able to assist accountancy professionals by leveraging on the Government’s comprehensive support packages. By aligning our initiatives with the Government’s support measures, we will be able to help accountancy professionals more effectively in these challenging times,” assured Dr. Nurmazilah.
“The Institute recognises that COVID-19 is an evolving situation, and we will continue to be in discussions with relevant Government agencies to provide feedback on the challenges faced by the profession in order to finetune the support measures,” she concluded.