Budget 2021 Highlights

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Highlights of Budget 2021 tabled in Parliament today by Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz.


Following Covid-19, the government announced the Penjana stimulus package worth RM35 billion and Prihatin package worth RM10 billion.

Overall, the stimulus packages are worth RM305 billion or 20.7% of GDP.

The government plans to raise the ceiling for the Covid-19 Fund from RM20 billion to RM65 billion to fund the Kita Prihatin supplementary assistance package.

The Health Ministry’s frontliners will receive a one-off payment of RM500 as a token of appreciation by the government for their efforts in tackling the Covid-19 pandemic.

The monthly RM600 Covid-19 Special Allowance for the frontliners will continue to be disbursed until the pandemic is over.

The Bantuan Sara Hidup (BSH) assistance programme will be replaced with the Bantuan Prihatin Rakyat (BPR) programme. Under the new BPR programme, aid to B40 and M40 groups will be increased and allocated according to the household income as well as number of children in each household:

  • Households with monthly income below RM2,500 with one child will receive RM1,200, while households with two children will receive RM1,800.
  • Households with monthly income between RM2,501 and RM4,000 with one child will receive RM800, while households with two children will receive RM1,200.
  • Single adults with monthly salary below RM2,500 will receive RM350. The age limit for single individuals is also reduced to 21 years old from the previous 40 years old.

Financial aid schemes to help the OKU community and underprivileged families include:

  • RM200 aid for per child under 6-years-old in underprivileged families
  • RM150 aid per child over 7-years-old to 18-years-old in underprivileged families
  • RM300 aid for disable people unable to work
  • RM450 allowance for OKU workers
  • RM 500 allowance for senior citizens, workers who take care of the OKU community, and patients with chronic illnesses

The tax relief for personal, spouse and children’s medical care expenses for serious illness is increased to RM8,000 from RM6,000.

The government has agreed to allow contributors to withdraw from their EPF Account 1. The withdrawal would be RM500 a month, up to RM6,000 for a year. Eligible members can start applying from January 2021 onwards.

To encourage Malaysians to spend, Employees Provident Fund (EPF) contributions will be cut from 11% to 9% from January 2021 for 12 months.

The government has agreed to lower the rate for individual income tax by one percent for those earning taxable wages from RM50,001 to RM70,000.

There will be no blanket moratorium, but low-income earners and micro-businesses can apply for reduced, postponed payments. The first option is to postpone monthly instalments for three months, or the second option is to reduce the monthly instalment by 50 percent for a period of six months.

RM1.7 billion in subsidies, incentives and other assistance to farmers and fishermen.

RM30 million to improve and provide childcare centres and preschools in government building and hospitals.

RM3.7 billion to create some 500,000 jobs to address rising unemployment caused by the Covid-19 pandemic.

RM1.4 billion to the Prime Minister’s Department for the development and management of Islamic affairs next year.

RM1 billion for reskilling and upskilling 200,000 trainees.

RM21 million for local social support centres to help women in domestic abuse households.

RM2.7 billion to improve infrastructure in rural areas, with RM1.3 billion for road repairs alone.

RM6.5 billion to improve education at Bumiputera institutions, namely Mara and UiTM.

RM95 million special micro-credit financing scheme to empower women entrepreneurs.

RM1 billion as an incentive for technology and high value-added investments.

RM103 million to build, upgrade and maintain sports facilities nationwide.

One-off credit of RM50 to the e-wallet accounts of those aged between 18 and 20.

RM16 billion for the Defence Ministry and RM17 billion for the Home Affairs Ministry to beef up the country’s borders and security forces.

RM50 billion or close to a fourth of the RM322.5 billion federal budget for education, and RM14.4 billion for the Higher Education Ministry.