Struggling with financial insecurity? Here are some ways the M40 group can benefit from Budget 2023

KUALA LUMPUR, April 17 — Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim tabled Budget 2023 in the Dewan Rakyat on February 24 and announced a myriad of perks directed towards the middle-income group which represents 40 per cent of Malaysians, otherwise known as M40.

With the Budget approved by the Dewan Negara on April 5, it is now awaiting Royal Assent before it is gazetted.

Here is a compilation of initiatives which the M40 can make use of to bolster their financial health as the country moves to improve the economy in general:

Personal finance

Among the most prominent initiatives announced in Budget 2023 was a two percentage point reduction in personal income tax for the income brackets between RM35,000 and RM100,000.

To provide more long-term investment opportunities, the government increased the maximum investment per individual for Amanah Saham Bumiputera (ASB) and Amanah Saham Bumiputera 2 (ASB2) unit trust funds to RM300,000 from RM200,000.

The Amanah Saham Malaysia (ASM) fund, which is open to all Malaysians including non-Bumiputera applicants, will also be increased by RM5 billion.

ASB is only open to Bumiputera applicants.

Speaking to the Malay Mail, John Soppiah, a 29-year-old software engineer said: “I think the ASB and ASM increases are good. It helps people who want to have something relatively safe to invest in.

“I keep about RM20,000 of my savings in ASM. Although the return rates have dropped significantly in the past years, it is still better than most banks’ fixed deposits.

“But perhaps if anyone wants to start now, it would be better to put their money in EPF,” he said, referring to the Employees Provident Fund.

The EPF also got a boost in Budget 2023, with the government set to raise the limit of voluntary contributions to RM100,000 annually — up from RM60,000.

Malaysians will also be eligible for a tax relief of up to RM3,000 for voluntary contributions to their EPF account.

Also, under the i-Saraan scheme, which is meant to bolster EPF savings for the self-employed and unemployed, the government increased the maximum limit for its incentive to match voluntary contributions from RM250 to RM300.

To help more Malaysians buy their first homes, the government will continue to give full stamp duty exemption for those who purchase property at RM500,000 and below.

For homes valued between RM500,001 to RM1 million, first-time buyers are given a 75 per cent stamp duty exemption, an increase from the previous 50 per cent exemption.

Muhammad Ikram, a 30-year-old lawyer, said that he appreciated the stamp duty exemption as he was buying a home in Seremban worth some RM600,000, with his soon-to-be wife.

“The stamp duty would have been more than RM12,000. So I think that’s quite good. It’s money that can go towards my wedding later,” he said.

The government will also offer discounts on National Higher Education Fund Corporation (PTPTN) loan repayments from March 1 to May 31.

A 20 per cent discount will be given to those who make a full settlement within the period, while those who repay half in a single payment will receive a 15 per cent discount.

Those who opt for automatic salary deduction or scheduled direct debit repayments will also receive a 15 per cent discount. A five per cent discount will be given to those who repay via the myPTPTN mobile app.

The government also decided to continue the My50 initiative, which allows Malaysians to buy a monthly pass for RM50 that provides unlimited rides for 30 days on all Rapid Penang and Rapid KL rail and bus services.

For more savings, the tax relief limit on medical treatment expenses was increased to RM10,000, from RM8,000.

Business and upskilling opportunities

The Budget also provided grants and incentives for SMEs and employee upskilling training programmes.

Syarikat Jaminan Pembiayaan Perniagaan (SJPP), owned by Ministry of Finance Incorporate, will guarantee up to RM20 billion in loans from SMEs, with a government guarantee of up to 90 per cent for high technology, agriculture and manufacturing companies.

Another RM100 million was set aside for the SME Digitalisation Grant Scheme to supports SMEs including small hawkers to automate and digitise their business processes.

Under the scheme, matching grants of up to RM5,000 will be given to SMEs and small traders that subscribe to business digitalisation applications such as those relating to point-of-sale (POS) systems, accounting or inventory management.

To encourage youth to improve their capability and skills to earn a meaningful salary, the Human Resource Development Corporation (HRDCorp) will fund RM1 billion to assist employers provide skill training programmes for their workers that can improve their productivity and earning opportunities.

The amount of financial assistance will vary depending on the type of training course pursued.

Another programme with the allocation of RM60 million will be set up under the Social Security Organisation (Socso), for gig workers seeking to upskill.

The government will cover training fees for gig workers up to RM4,000 and allowance of RM300 for three months by Socso to replace the income of gig workers who are undergoing micro credentials skills training programmes.

Alternatively, gig workers going through micro-credential education programmes will be allowed to apply to receive up to RM2,500 per month for three months, to cover education programme fees.