Budget 2020

Continued pace of growth in 2020

GDP growth is forecast to improve marginally to 4.8% in 2020 from 4.7% in 2019.

Top three growth sectors in 2020

• Services - 6.2%
• Manufacturing - 4.1%
• Construction - 3.7%

Sustained exports despite global trade uncertainty

Gross exports in 2020 is expected to rise slightly by 1.0% to RM1.0 trillion.

Pick-up in investments

Private investment is anticipated to improve in 2020, growing at 2.1% compared to 1.5% in 2019.

Inflation and unemployment remain low

Inflation is forecast to stay low in 2020 at 2.0% and labour market conditions are expected to be stable, with unemployment rate at 3.3%.

A fiscal discipline Budget

Move to trim Budget deficit to 3.2% of GDP in 2020 from 3.4% in 2019.

Competing for high value-add investment

With customised packaged investment incentives to attract targeted Fortune 500 companies and global unicorns.

Speeding up investments in digital economy

Through the RM21.6 billion National Fiberisation and Connectivity Plan and over RM1 billion worth of grants for adoption of 5G, digital and business automation.

Plans to create 765,000 jobs in 5 years

Through investment support for SMEs and exporters as well as the Malaysians@Work initiative.

Reducing the cost of living

Minimum 18% discount on PLUS highways toll charges and introduction of the Rent To Own (RTO) home financing scheme.

Review of tax treatment for Small and Medium Enterprises (SMEs)

Chargeable income limit subject to the 17% preferential rate to increase from RM500,000 to RM600,000. Maximum limit on sales to qualify as an SME.

Tax incentives for automation

Extension of existing tax incentives for 3 years to YA 2023; and extension of incentive to services sector.

Individual income tax rates

New chargeable income band exceeding RM2 million with income tax rate of 30% for resident individuals.

Service tax - group relief facility

Group relief facility for taxable services under professional group allowed even where services are provided to third party, subject to meeting conditions.