Apart from the 1% decrease in income tax for the 2.91 million M40 households earning between RM50,001 and RM70,000 per year, Goh Lim Thye, a senior economics lecturer at Universiti Malaya, said the increase in tax relief limit for lifestyle from RM2,500 to RM3,000 would benefit the segment.
He also hailed increases in tax reliefs for those bearing medical costs of their parents, and welcomed the tax relief extensions for Private Retirement Scheme contributions and those enrolled in the National Education Savings Scheme.
“I believe the M40 group will appreciate these initiatives the most given their significant impact on disposable income,” he said.
Goh said the RM6.5 billion Bantuan Prihatin Rakyat (BPR), which replaces the Bantuan Sara Hidup (BSH) aid, and targeted repayment assistance programme from December will benefit those who have seen their income affected by the Covid-19 pandemic in the short term.
The expanded BPR will now cover 8.1 million B40 individuals, as opposed to the BSH cash assistance which benefitted 4.3 million individuals with a total allocation of RM5 billion.
Other key initiatives announced for the M40 in the budget include reduced EPF employee contributions from 11% to 9% and the targeted loan moratorium for three months, or 50% reduction in repayments for six months, for those who apply.
For the long term, Goh called on entrepreneurs to take part in training programmes and assistance promised to 100,000 entrepreneurs.
The Malaysian Trades Union Congress (MTUC), meanwhile, welcomed the extension of the Wage Subsidy Programme for another three months, stating it would help companies stay afloat.
“The wage subsidy is the right thing to do,” said MTUC’s deputy president, Mohd Effendy Abdul Ghani. “All SMEs (small- and medium-sized enterprises) are facing the same problem (lower revenue) now, so this will help sustain them. Without companies, there are no jobs.”
The Wage Subsidy Programme has also expanded to include retail sector workers earning RM4,000 and below a month, with the limit of eligible employees increasing from 200 employees per company to 500.
A total of RM1.5 billion has been allocated for this purpose, and it is expected to help about 70,000 employers and 900,000 employees.
The budget has also been welcomed by gig economy stakeholders like Dego Ride founder Nabil Feisal Bamadhaj, who said the RM110 million earmarked to encourage entrepreneurship among gig workers and self-employed under the iTEKAD programme would help gig economy workers create new revenue streams.
“I believe it will help provide an opportunity to interested top-performing gig workers to upgrade and further upskill themselves as self-made entrepreneurs and grow their abilities whilst remaining resilient during such trying times,” said Nabil.
“The amount earmarked for iTekad is small, but I believe that with the right implementation and disbursement, it will be able to create a strong positive impact on the people and the economy.”