The interim Prime Minister of Malaysia, Tun Dr. Mahatir Mohamad, announced a RM20 Billion 2020 Economic Stimulus Package (‘Stimulus Package’) yesterday to mitigate the economic impact of the COVID-19 outbreak affecting many countries in the world.
Some of the measures included in the Stimulus Package are as follows –
- To assist businesses most adversely affected by the COVID-19 outbreak, the Government will implement the following measures for a period of six months from April 2020 to September 2020 –
- allow the deferment of monthly income tax instalment payments for businesses in the tourism sector; in addition, companies affected by COVID-19 will be allowed to revise their profit estimates for 2020 with respect to monthly income tax instalment without penalty;
- provide a 15% discount on electricity bills to hotels, travel agencies, airlines, shopping malls, convention and exhibition centres;
- exempt hotels and travel related companies from Human Resource Development Fund levies; and
- The Government will exempt hotels from the 6% service charge from March 2020 to August 2020.
- Bank Negara Malaysia will provide a RM2.0 billion Special Relief facility for working capital for affected Small Medium Enterprises at 3.75% interest.
- Bank Simpanan Nasional will allocate RM200 million in microcredit facilities at 4.0% interest for affected businesses.
- Banks are required to grant payment moratorium comprising restructuring and rescheduling of loans for affected businesses and individuals.
- Malaysia Airports Holdings Berhad will provide rebates on rental of premises at airports as well as landing and parking charges.
- A one-off payment of RM600 will be made to taxi drivers, tourist bus drivers, tourist guides and registered trishaw drivers to off-set the loss of income from lower tourist arrivals.
- Government medical doctors and other personnel directly involved in the containment efforts will be eligible for a special monthly critical allowance of RM400 and immigration and related front line staff for a special monthly critical allowance of RM200 commencing February 2020.
- The maximum training fee for retrenched workers under the Employment Insurance System will be increased from RM4,000 to RM6,000 and the maximum daily training allowance provided to trainees under the scheme will be increased from RM20 to RM30.
- Measures to stimulate the tourism industry include the following-
- a personal income tax relief of up to RM1,000 will be granted for expenditure related to domestic tourism;
- RM500 million will be allocated for –
- the issue of digital vouchers to Malaysians for domestic tourism of up to RM100 per person for domestic flights, rails and hotel accommodation; and
- matching grants for tourism promotion.
- The minimum contribution by employees of 11% to Employees Provident Fund will be reduced to 7% from 1 April 2020 to 31 December 2020.
- Apart from bringing forward the RM200 payment for Bantuan Sara Hidup recipients from May 2020 to March 2020, an additional sum of RM100 will be paid to Bantuan Sara Hidup recipients in May 2020 and subsequently, an additional RM50 via e-tunai.
Other broader measures have been proposed to stimulate the Malaysian economy, in particular, the rural economy. Details of these are set out in the Stimulus Package.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.