THE upcoming Budget 2023 will focus on enhancing the momentum of economic recovery, strengthening economic resilience, and implementing comprehensive reforms.
The business pillar of Budget 2023 seeks to advance ease of doing business, speed up the recovery of the tourism industry, foster new growth sectors, and encourage digitalization and automation. It is one of the four pillars of the budget.
On the other hand, the economic pillar seeks to ensure inclusive development, improve access to capital, notably for entrepreneurs, and also promote green growth and sustainable development.
On 24 February 2023, Prime Minister Datuk Seri Anwar Ibrahim – who is also the Finance Minister -re-tabled the highlighted anticipated Budget 2023 (also known as Belanjawan Madani).
Besides that , the government wants to “ensure local MSMEs are again competitive and able to increase their business capacity.” So here’s a list of various facilities that have been proposed under Belanjawan Madani, which MSMEs and SMEs can expect to be able to tap into if the national budget is passed.
- The government allocated RM40 million to the Malaysia Joint Investment Fund ( MyCIF ) as a new fund for equity crowdfunding.
- The SFC promotes the secondary trading of more private market instruments.
- The government will continue to grant tax relief of up to RM1.5 million for listing on the GEM and LEAP markets until the year of assessment 2025.
- In order to encourage local high-growth technology companies to go public, the government will allow dual-tier stock issuance.
As we look towards 2023, it is expected that governments around the world will also invest and promote the development of tech industry. This is in line with the global push towards sustainable development
Within the budget 2023, one area where governments have invest in is providing funding opportunities for SMEs and corporations to develop and adopt emerging technologies. This will include offering grants, tax incentives, and other financial incentives to encourage businesses to invest in digital technologies.
- Allocation of RM100 million under the Digitization Grant Scheme for SMEs and small vendors to support business automation and digitization. Separately, there is an RM1 billion facility under Bank Negara Malaysia (BNM) aimed at incentivizing SMEs to automate processes and digitalize operations.
- Khazanah Nasional and EPF to invest in innovative and high-growth local start-up companies with an investment value of RM1.5 billion.
- Govt is providing tax incentives and grants to encourage private sector investment in large-scale agriculture and improve advancement and use of technology. Elaun Modal Dipercepatkan and 100% income tax exemption on capital expenditure will be available, and the tax incentive application period for food production projects will be extended until end-2025, with an expanded scope to include modern agriculture projects
- Govt aims to enact Consumer Credit Act and set up a consumer credit monitoring board to regulate companies providing consumer credit such as “Buy Now Pay Later” schemes this year
- Govt to provide RM50 million in matching grants to encourage automation of plantation sector through the use of robotics and artificial intelligence
- RM6 billion strategic financing by Bank Pembangunan Malaysia to promote a sustainable and automated agenda
Apart from this, the government has promoted the Green Technology Financing Scheme ( GTFS) in order to reducing carbon emissions to mitigate the effects of climate change and to stimulate the adoption of green technologies throughout the nation as part of its commitment to attaining net zero greenhouse gas emissions by 2050.
- Khazanah is providing RM150 million to boost environmentally-friendly project development. This includes supporting the market carbon and reforestation.
- In addition, the Green Technology Financing Scheme (GTFS) is improved with the guaranteed value increased to RM3 billion by 2025.
- Bank Negara Malaysia will also provide RM1 billion in soft loans under the High Technology and Green Facility to support innovative start-ups, as well as RM1 billion under the Low Carbon Transition Facility for small and medium enterprises (SMEs).
- BNM provides loans of up to RM2 billion to support sustainable technology start-ups and help SME companies implement low-carbon practices.
- The government plans to extend the period of the Green Investment Tax Allowance (GITA) and Green Income Tax Exemption (GITE) until December 31, 2025, by extending the incentive period from 3 to 5 years for eligible green activities.
With this, we hope that company owners, especially micro-entrepreneurs and SME owners, would benefit from the several vital initiatives included in Budget 2023 to bounce back and grow their businesses to greater heights!
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