With Malaysia on the cusp of imposing the most restrictive movement control measures since March 2020, the Prime Minister of Malaysia launched a RM40 billion financial aid package, the Program Strategik Memperkasa Rakyat Dan Ekonomi Tambahan ('Pemerkasa +'), on 31 May 2021.

Pemerkasa + is an additional relief package to the various financial aid packages launched by the Government since the onset of the Covid-19 pandemic in early 2020. In particular, it follows on from the Program Strategik Memperkasa Rakyat Dan Ekonomi ('Pemerkasa') announced on 17 March 2021. Our write-up on Pemerkasa can be accessed here.

Pemerkasa + is grounded on three main objectives namely –

  • increasing public healthcare capacity;
  • continuing the rakyat welfare agenda; and
  • supporting business continuity.

This Alert will briefly outline the initiatives under the first two objectives of Pemerkasa + and provide a more detailed write-up on the initiatives to support business continuity.

Increasing public healthcare capacity

A sum of RM1.0 billion is allocated under this objective, which is to be utilised as follows:

  • RM450 million is to be spent to increase bed and intensive care unit capacity for hospitals under the Health Ministry, teaching hospitals and military field hospitals; and
  • RM550 million is to support Covid-19 related expenses by various agencies, including medicines, reagents, and contract workers' appointments.

Continuing the rakyat welfare agenda

Cash aid for lower income groups

A sum of RM2.1 billion is set aside for the Bantuan Prihatin Rakyat cash aid. Households with a monthly income of less than RM2,500 will receive RM500, while those with a monthly income between RM2,501 and RM5,000, will receive RM300. Malaysians who are single will receive a payment of RM100. This additional aid will be credited to the recipients' account by June 2021.

Relief for loan repayments

All B40 groups and persons who have lost their jobs are given the option of (a) an automatic approval of a 3-month loan repayment moratorium; or (b) a 50% reduction in loan repayment for six months, commencing June 2021.

Bus and Taxi Hire Purchase Rehabilitation Scheme

Eligible bus and taxi operators under the Bus and Taxi Hire Purchase Rehabilitation Scheme will be granted a loan moratorium of up to 12 months and to extend their loan tenure for up to 36 months, a measure that is valued at RM1 billion.

Several of the initiatives classified under this objective have been relocated by us to the third objective as they also support business continuity.

Supporting business continuity

Some of the measures under Pemerkasa + that support business continuity are outlined below.

Wage Subsidy Programme

A RM1.5 billion Wage Subsidy Programme under the Social Security Organisation (SOCSO) will be made available for all affected economic sectors, subject to a limit of 500 employees per application. It is expected that approximately 200,000 employers and 2.5 million employees will benefit from this initiative.

Increase in Targeted Relief and Recovery Facility

An additional RM2.0 billion with a financing rate as low as 3.5% will be made available by Bank Negara Malaysia (BNM) through financial institutions to affected Small and Medium Enterprises ('SMEs') under the Targeted Relief and Recovery Facility. This additional amount, together with the unutilised portion of the facility of RM5.0 billion, means that a total of RM7.0 billion remains available under the Targeted Relief and Recovery Facility.

Relief for loan repayments for affected SMEs

SMEs that are not allowed to operate during the movement control order will be given the option of (a) an automatic approval of a 3-month loan repayment moratorium; or (b) a 50% reduction in loan repayment for six months, commencing June 2021.

Further allocation for microcredit working capital

Bank Simpanan Nasional (BSN), National Entrepreneur Group Economic Fund (TEKUN), Majlis Amana Rakyat (MARA), Small and Medium Enterprises Corporation dan Yayasan Pembangunan Ekonomi Islam Malaysia (YAPEIM) will allocate RM1.5 billion as working capital facilities for micro-credit businesses with financing rates as low as 3%.

Additional payment under Prihatin Special Grant

Micro-SMEs that have received the Prihatin Special Grant (GKP) will each receive a further RM500, increasing the total payment to RM1,500 for each recipient. This initiative is expected to benefit approximately 1 million micro-SMEs.

Tax relief for rental discounts for business premises

A special deduction from income tax will be granted to owners of business premises who offer at least 30% rental discounts to tenants which are SMEs or non-SMEs for six more months until 31 December 2021.

Three-months rental discount for MARA entrepreneurs

MARA entrepreneurs affected by the closure of the economy will be given a 30% discount on the rental of business premises for three months from May to July 2021.

One-off aid for drivers of taxis, rental cars, buses, school buses and e-hailing vehicles

The Government will give a one-off Special Assistance payment of RM500 each to 17,000 tourist drivers, 40,000 taxi drivers, 11,000 school bus drivers, 4,000 tour bus drivers and 62,000 rental car and e-hailing vehicle drivers. These payments, amounting to RM68 million, will be paid to registered drivers in July 2021.

Extension of electricity bill discounts to selected sectors

The 10% discount on electricity bills granted to hotel operators, tour and travel agencies, shopping malls, convention centres, theme parks and local airline offices will be extended for three months from July to September 2021.

Postponing tax penalties

To reduce the financial burden on businesses, the Inland Revenue Board of Malaysia will consider appeals to postpone payment of penalties to year 2022 and to reschedule overdue tax payments from affected taxpayers and businesses.

Extension of stamp duty exemptions for Home Ownership Campaign

The exemption from stamp duty for the purchase and financing of properties under the Home Ownership Campaign (HOC) which ended on 31 May 2021, has been extended until 31 December 2021.

Sales tax exemption on motor vehicles extended

The sales tax exemption for completely knocked down and completely built up passenger vehicles will be extended until 31 December 2021.

Tourism tax and service tax on accommodation bookings

It was reiterated that the exemptions from tourism tax and service tax on accommodations provided by hotel operators announced as part of the Pemerkasa programme on 17 March 2021, will continue until 31 December 2021.

Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Act 2020

The Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Act 2020 will be enhanced to assist affected individuals and businesses. The protection in relation to the inability to perform contractual obligations in respect of a scheduled contract will be extended to 31 December 2021. Mediation services at the Covid-19 Mediation Centre will be provided without charge to all individuals and businesses, regardless of their background.


Although Pemerkasa + is valued at RM40 billion, it will entail a direct injection of only RM5 billion into the economy by the Government. The Prime Minister has candidly, and ominously, stated that "I wish to be honest that the government has very limited 'fiscal room' to spend during this time." 1

As it appears that there is not much left in the Government's coffers from which further financial aid can be drawn, it is sincerely hoped that the stricter lockdown measures imposed under the latest iteration of the movement control measures and the acceleration of the implementation of the Government's vaccination programme will bring the Covid-19 pandemic under control, so that the people can move on to rebuild their lives, livelihood and the country's economy.


1. Paragraph 3 of Prime Minister's speech for the launch of Pemerkasa + on 31 May 2021.

Originally published 02 June 2021

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