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Budget 2020: 16 Things That Might Affect YOU, Financially

BY Nisya Aziz

Updated 01 Nov 2019

The much-anticipated Belanjawan 2020 has finally been tabled by the Finance Minister, Lim Guan Eng. To those yang followed, how do you feel about it? Well, we thought it was pretty decent - not as exciting as last year, of course.

It could be because of the allocation for Budget 2020 (RM297 billion (bil)) is lesser than Budget 2019 (RM314.5 bil). Having said, some of you (the rakyat) will not be disappointed - got a lot of incentives liao. Let’s take a look at what are things that will affect you financially in 2020.

SIDE NOTE: Lim has made it clear during the tabling that Goods and Services Tax (GST) WILL NOT make a come back. Harap maklum.


What's covered in this article?

1. We can expect more people using e-wallets in 2020.

According to a survey report by Nielsen, the overall adoption of e-wallet remains low at only 8%. So, to promote e-wallet usage among Malaysians, gahmen will credit RM30 into the e-wallet of every Malaysian who is 18 years old and above. 

The money will be credited on 1st January 2020 and will be valid for two months. All you need is to own an identity-verified e-wallet account with selected service providers (gahmen didn’t disclose which e-wallet yet). Take note this is not for atas people; you’ll need to earn less than RM100,000 a year to be eligible for this perk.


2. Digital service tax will come into effect soon. Gahhh.

Nothing new about this - more like a REMINDER. As announced in the previous budget, the Digital Service Tax will come into effect starting 1 January 2020. Yang subscribe to streaming services like Spotify and Netflix tu, be prepared. 

Other things that are affected include digital software and games distribution companies such as Steam, as well as digital advertising offered by Google.


3. Who doesn't like to pay for tolls? Angkat tangan.

Rejoice as there’ll be a minimum reduction of average toll charges by 18% discount across all
PLUS highways starting 2020
. Lim said the discount on toll charges for the North-South Highway will save highway users up to RM1.13bil in 2020.

Other than that, the introduction of the congestion charges will be lowered by up to 30% of the present toll rates during near peak and normal hours. During off-peak hours the toll rate is FREE. This will provide savings to the highway users nearly RM180 million a year, katanya.

To Penangites or yang suka pergi sana, effective 1 January 2020, the toll rates for cars at the Second Penang Bridge will be reduced from RM8.50 to RM7.


4. The promise of targeted fuel subsidy programme (PSP) will not di-capati-kan.

Starting in January 2020, PSP will be launched in Peninsular Malaysia with two eligible categories:
  • For eligible recipients of the BSH: The petrol subsidy is RM30 per month for car owners and RM12 per month for motorcycle owners. This subsidy will be in the form of cash transfer, deposited into the recipient’s bank account every 4 months. The first payment will be made in April 2020 for the period of January to April 2020.
  • For all other motorists who are not BSH recipients: They will receive a special Kad95 which allows them to enjoy the fuel subsidy at a discount of 30 sen per litre limited to 100 litres per month for cars or 40 litres per month for motorcycles when purchasing RON95 at the petrol station. The Kad95 will be implemented progressively during the first quarter of 2020.
Bear in mind that this perk is only for Individuals who own not more than 2 cars and 2 motorcycles. Also, if you own an expensive car, you can kiss this benefit goodbye.


5.  RON95 and diesel retail prices will be gradually floated. Nuuuuu...

Yup, you read that right. Upon commencement of the fuel subsidy scheme, RON95 and
diesel retail prices will be gradually floated. Why? Because gahmen wants to reduce the leakages and cross-border smuggling of subsidised fuel which is estimated to cost millions of ringgit. 

But, fret not. The usual fuel subsidy will kick-in whenever the RON95 market price determined by the Automatic Pricing Mechanism (APM) is above RM2.08 per litre. Meanwhile, motorists in Sabah and Sarawak will continue to enjoy a fuel price ceiling of RM2.08 per litre for RON95 and RM2.18 per litre for diesel.


6. The unemployed graduate will get an incentive for securing a job (untung lah).

In 2018, there were more than half a million unemployed Malaysians. At least 140,000 of them are graduates. Recognising the challenge, under the #GraduanKerja initiative, unemployed graduates (for more than 12 months) who gets a job will receive a wage incentive of RM500 per month, for 2 years. It will be credited into your KWSP account.

There’s also an incentive to employers who hired these graduates - RM300 per month for each new hire, for 2 years. Win-win!


7. Women who return to work also will receive an incentive & extended tax exemption.

Are you a woman between the age of 30 and 50, who have stopped working for more than a year? This is for you. Under the #WanitaKerja, you’ll be given a salary incentive of RM500 a month for 2 years if you start going back to work. The money will be credited into your KWSP account. The employers also will get RM300 per month for 2 years for hiring.

On top of that, the current income tax exemption for women who return to work will be extended until 2023. Guys, please extend this message to the women of your life.


8. If you take over a foreign worker’s job, you’ll get an incentive.

We always complain that there’s a lot of foreigners in our country and they’re taking the rakyats’ jobs. Nah, now you can take over their job and get extra monies for it. You just need to replace a foreign worker’s job and you’ll be given a monthly incentive of RM350 or RM500 for 2 years (depending on the sector). Ade bran or not? 

Employers pulak will receive a monthly incentive of RM250 in the same time period. Take note that the incentives will be credited to your KWSP account.


9. Rent To Own (RTO) financing scheme will be introduced.

Some of us can’t buy a house because we can’t afford the initial 10%. So to rectify this issue, gahmen will collaborate with the financial institutions in introducing Rent To Own (RTO) financing scheme. 

FYI, this RTO scheme is for the purchase of the first home that is priced up to RM500,000. Basically, you’ll rent the property for up to 5 years. Then, after the first year, you’ll have the option to purchase the house based on the price fixed at the time the tenancy agreement is signed. On top of this, Gahmen will provide stamp duty exemptions as well.

Aside from RTO initiative, gahmen will also extend the Youth Housing Scheme (administered by Bank Simpanan Nasional) from 1 January 2020 until 31 December 2021. The scheme offers a 10% loan guarantee through Cagamas to enable borrowers of full financing and RM200 monthly instalment assistance for the first two years limited to 10,000 home units only.


10. The base year for the Real Property Gains Tax (RPGT) has been revised.

One of the complaints has been acknowledged by the gahmen. There was an article from our contributor, about it too - “How the New RPGT Ruling Is Affecting the Rakyat?”. So, in response to the public feedback on the capital gains tax, gahmen will enhance RPGT treatment by shifting the base year to 1 January 2013 from 1 January 2000 for property bought before the said date. This means property owners will have lower tax payment.


11. Foreigners don’t need to buy RM1mil property anymore.

Some of the locals might not be happy with this decision. But, to reduce supply overhang of condominiums and apartments which is amounting to RM8.3bil in Q2 2019, gahmen will lower the threshold on high rise property prices in the urban areas (Lim didn’t mention exactly where) for foreign ownership from RM1mil to RM600,000 in 2020.

READ: Malaysia My Second Home (MM2H): The Latest Requirements & Guidelines To Apply


12. You can withdraw EPF to get a professional cert.

Have you been thinking about getting a professional certificate to upskill? The wait until next year. This is because EPF will expand the scope of its education withdrawal for qualifications attained at certificate level relating to the Fourth Industrial Revolution (IR4.0). Additionally, EPF is looking to expand this withdrawal to include members’ parents and spouse.


13. Parents who send their kids to TASKA will get additional tax relief.

Besides creating more TASKAs to improve the working environment for women and parents in general, gahmen has another good news to you parents out there. Gahmen knows that taking care of kids is not cheap. So to help ease your financial burden, parents who enrol their children in registered nurseries and kindergartens will get additional individual tax relief for fees paid, which is from RM1,000 to RM2,000.


14. Single people will get more welfare assistance.

If you’re single, above 40 years and is earning less than RM2,000 a month, clap your hands. You’ll be eligible for RM300 Bantuan Sara Hidup (BSH) aid. To add, disabled individuals aged 18 and above (with gaji less than RM2,000) will also be entitled to receive BSH payment of RM300, and qualify automatically as a recipient of the free MySalam Takaful scheme.


15. Gahmen didn’t forget the housewives.

If you didn’t get the memo, housewives can now opt-in for the EPF contributions under the i-Suri initiative. In 2020, this programme will also be expanded whereby husbands may voluntarily elect to contribute 2% from his 11% EPF employee contribution to their wife’s EPF Account. On top of that, gahmen will further extend the benefits under i-Suri via social safety coverage under SOCSO.


16. The minimum wage will be raised again!

To improve the livelihood of the lower-income groups, gahmen had increased the minimum wage to RM1,100 per month effective January 2019. Effective 2020, the minimum wage will be increased to RM1,200. This will only apply to those who are living in major urban centres. 

The increment is kinda disappointing, but at least gahmen decided to naikkan the minimum wage. Perhaps we can see it increase again in the next tabling? 

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About the Author

Nisya Aziz

A storyteller at Finology, who drinks coffee like its water, Nisya enjoy bringing valuable, educational and entertaining content to others. When not busy crafting content, you’ll find her in the boulder gym or on stage, performing theatre shows.


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