KUCHING: The large allocation (RM322.5 billion) in Budget 2021 is very much needed in this unprecedented Covid-19 pandemic and economic crisis.
Sarawak Business Federation (SBF) secretary general Jonathan Chai however noted that not much was allocated to help the small and medium enterprises (SMEs).
He was disappointed that insufficient aid was given to SMEs.
“SMEs are the backbone of the country’s economy and also the major contributor of jobs opportunities in the private sector,” he told New Sarawak Tribune on Saturday.
He also said even though the personal income tax is reduced by one percent for those earning RM50,001 to RM70,000, the extent of revision was insignificant.
“I would have hoped for a bigger adjustment on the rates of the personal income tax as well as a reduction in the rate of corporate tax to ease the cash flow of the businesses to help fight the Covid-19 pandemic,” he said.
He also raised concern on allowing withdrawal from the Employees Provident Fund (EPF) Account 1.
Chai said while there would be an anticipated drop in the savings in EPF of the employees as their minimum contribution would be reduced to nine percent from 11 percent starting Jan next year, their savings for retirement would dwindle further if they were allowed to withdraw RM500 per month from their EPF Account 1 up to RM6,000 for 12 months.
“As it is, studies have shown that majority of the contributors do not have enough EPF saving for their retirement and such ‘convenience’ provided in the budget would exacerbate the dilemma,” he pointed out.
Chai, who is also president of Association of the Boards of Management of Aided Chinese Primary Schools in Kuching, Samarahan and Serian Divisions, welcomed the RM725 million allocation for upgrading 50 dilapidated schools in Sabah and Sarawak next year.
“However, the sum is not substantial but at least there is a commitment on the part of the federal government in resolving the long outstanding issue of dilapidated schools in both states.
“I am also glad that Sarawak will receive RM4.5 billion in development expenditure for infrastructure development including water, electricity, roads, health and education facilities while the construction of the Pan Borneo Highway will continue to receive the necessary funding,” he said.
He added there was good news for the business community especially tourism operators and housing developers where the government will extend the wage subsidy programme to employees in the tourism sector for another three months.
“To encourage home ownership, the government will also implement several initiatives including a full stamp duty exemption on the instruments of transfer and loan agreements for the purchase of the first homes worth up to RM500,000. Hopefully, such initiatives would boost the sale of the houses which have been adversely affected under the prevailing deteriorating economy,” he said.
