Business winners and losers in the 2021 budget

 

Glove manufacturers were spared a windfall tax on their enormous profits. (Bernama pic)

KUALA LUMPUR: Malaysia has unveiled its biggest-ever budget to help the virus-ravaged economy get back on track for rapid growth, allocating RM322.5 billion in total expenditure next year, which it hopes will help the $365 billion economy rebound with growth of 6.5%-7.5%. The administration also proposed a cut in personal income taxes, handed out monetary aid and eased costs for first-time home buyers.

Here’s a look at the biggest winners and losers.

WINNERS

Glove makers

Malaysia’s biggest rubber glove producers — Top Glove Corp., Hartalega Holdings Bhd., Supermax Corp. and Kossan Rubber Industries — were spared a windfall tax on their supernormal profits. Instead, they will contribute a combined 400 million ringgit to bear some of the costs of a coronavirus vaccine and health equipment.

Builders

Builders including Gamuda Bhd. and IJM Corp. stand to gain. The government will go ahead in implementing transport infrastructure projects and will allocate RM15 billion to fund the Pan Borneo Highway, Gemas-Johor Bahru electrified double-tracking rail project and phase one of the Klang Valley double tracking project.

The Rapid Transit System Link from Johor Bahru to Woodlands, Singapore and the MRT3 in Klang Valley will also continue. The government will also continue with the High-Speed Rail Project with Singapore because of its multiplier effect on the economy.

Property

To further boost home ownership, the government will extend full stamp duty exemption on transfer and loan agreements for first-time home buyers until the end of December 2025. The government will also set aside RM1.2 billion for public housing projects.

Palm Oil Planters

The government will allocate RM400 million to write off interest on the debt of farmers under state-owned palm oil plantation agency Felda, as well as for development programmes for them.

LOSERS

Smokers

Smokers, vapers and tobacco companies like British American Tobacco Malaysia Bhd. may be impacted. The government will impose an excise duty of 10% on devices for all types of electronic and non-electronic cigarettes including vape effective starting Jan. 1.

Meanwhile, liquid used in electronic cigarettes will attract an excise duty at a rate of 40 sens per millilitre. - FMT