30 October 2019
On 11 October 2019, YB Lim Guan Eng, the Finance Minister of Malaysia, tabled the Supply Bill (Budget) 2020 (“2020 Budget”) in Parliament. This is the second Budget to be tabled under the Pakatan Harapan Government and is themed “Driving Growth and Equitable Incomes Towards Shared Prosperity”.
The highlights in the 2020 Budget include the following stated goals:
- Ensuring that at least 30% of tenders of each Ministry is reserved for Bumiputera contractors;
- Allocating MYR1 billion in customised packaged incentives to attract investment from Fortune 500 and global unicorn companies;
- Restructuring development financial institutions by merging existing banks such as Bank Pembangunan Malaysia, Danajamin Nasional, SME Bank and EXIM Bank Malaysia;
- Bank Negara Malaysia to finalise the digital bank licensing framework and open it for application in the first half of 2020;
- Implementing the National Fiberisation and Connectivity Plan over the next five years, adopting a public-private partnership approach involving a total investment of MYR 21.6 billion;
- Raising minimum wage in urban areas to MYR1,200 a month in 2020;
- Encouraging the hiring of fresh graduates and returning women workers. Such groups would receive two-year pay incentives of MYR500 a month while employers receive two-year hiring incentives of up to MYR300 a month;
- Revising statutory maternity leave from 60 to 90 days from 2021;
- Allocating MYR25 million to Malaysia Healthcare Tourism Council to strengthen Malaysia’s position as the preferred destination for medical tourism in the ASEAN region for oncology, cardiology and fertility treatments;
- Lowering the threshold on high rise property prices in urban areas for foreign ownership from MYR1 million to MYR600,000 in 2020;
- Proposing a tax rate of 30% to a new band of taxable income in excess of MYR2 million; and
- Implementing the Digital Services Tax with effect from 1 January 2020, which will apply to services such as downloaded software, music, video or digital advertising.