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KUALA LUMPUR, Oct 30 -- Budget 2022 enhances support to low-income households plagued by the impact of the pandemic through an increase in direct cash handouts as well as reaching out to a larger group of people, said PwC Malaysia.
Its tax leader, Jagdev Singh said the measures announced were all-encompassing and comprehensive, with granular details on the allocations not seen in previous budgets.
"Budget 2022 does well in addressing immediate concerns of the nation in ensuring job creation and retention and encouraging capital spending whilst ensuring fiscal sustainability.
"It is also enlightening to note that it manages to introduce measures to drive the nation’s environmental, social and governance (ESG) and digitalisation agenda, despite the challenging environment," he said in a statement.
Budget 2022, Jagdev said, continues one of the key focus areas from the previous Budget, that being the employment and upskilling of the Malaysian workforce with the objective of bringing down the national unemployment rate to four per cent.
A progressive move is the expansion of the JaminKerja hiring incentive under Social Security Organisation (SOCSO) with an allocation of RM2 billion to incentivise the hiring of unemployed Malaysians and targeted segments such as people with disabilities, the Orang Asli, ex-convicts and women returning to the workforce by subsiding between 20 per cent and 40 per cent of the monthly salary of these groups, he said.
Jagdev also said the budget deficit is targeted to be maintained at six per cent and this is likely to be achieved through expansion of the scope of current taxes such as the sales and services tax and excise duties as well as other one-off measures.
"This provides room for larger structural reforms in the coming years to further broaden the tax base," he said.
Meanwhile, Chartered Tax Institute Malaysia (CTIM) president Farah Rosley said it was encouraging to note that the government would not be imposing any sales tax for passenger vehicles assembled in Malaysia until June 30, 2022, and imported vehicles would be given a 50 per cent discount in sales tax in Budget 2022.
She said Malaysians could benefit from this extension of sales tax incentives to purchase locally-assembled passenger vehicles and imported vehicles at a reduced price.
"This will continue to encourage the purchase of new motor vehicles and support the automotive industry which includes a significant number of small and medium enterprises (SMEs) in the supply chain," she said in a statement today.
Overall, she said Budget 2022 covered a wide spectrum in terms of tax deductions and incentives for businesses, employment, women’s development, cost of living, rural development and others that would help sustain and spur economic activities, rebuild economic resilience, and catalyse the reform agenda against the backdrop of the prolonged COVID-19 pandemic.
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