On 15 June 2021, the Prime Minister of Malaysia, Tan Sri Muhyiddin Yassin, unveiled the National Recovery Plan ("NRP") which comprises four phases. With the First Phase being extended from 29 June 2021 until the thresholds for implementing the Second Phase are attained, the Prime Minister launched a RM150.0 billion financial aid package, the Pakej Perlindungan Rakyat Dan Pemulihan Ekonomi ("Pemulih") on 28 June 2021.

Pemulih has a value of RM150.0 billion, of which RM10.0 billion is a direct fiscal injection by the Government.

Pemulih has three focus areas, namely:

  • continuing the rakyat welfare agenda;
  • support businesses; and
  • accelerating vaccination.

This Alert will briefly outline the initiatives under Pemulih which seek to support businesses.

Wage Subsidy Programme

The Government will continue the Wage Subsidy Programme whereby the Government will support up to 500 workers per employer with assistance of RM600 per worker for four months. There will be a payment for two months for all sectors in the Second Phase of the NRP, and a further payment for two months for the sectors categorised under the negative list in the Third Phase of the NRP.

Unlike the previous wage subsidy programmes, there are no salary limit conditions for the Wage Subsidy Programme under Pemulih. Hence, employers may apply even if their employees earn more than RM4,000 a month.

The Government has allocated RM3.9 billion for this initiative, which is expected to benefit more than 2.5 million workers.

Additional financing for small medium enterprises and micro-enterprises

Bank Negara Malaysia ("BNM") has agreed to provide an additional RM2.0 billion financial support to small and medium enterprises ("SMEs") and micro-enterprises through financial institutions. In addition to the unutilised portion of RM6.6 billion of this facility, the amount available to SMEs and micro-enterprises is now RM8.6 billion.1

Government Guarantee Scheme

To assist SMEs, Syarikat Jaminan Pembiayaan Perniagaan Berhad ("SJPP") has increased the ceiling of its government guarantee scheme for 2021 by RM10.0 billion to RM36.5 billion. As of 24 June 2021, about RM3.1 billion under the guarantee scheme remains available.

To further assist SMEs to obtain financing facilities, the Government will further increase the ceiling of the guarantee under SJPP by RM20.0 billion to RM56.5 billion, thereby making RM23.1 billion available under the SJPP guarantee scheme.

Additional payments under Prihatin Special Grant

In addition to the RM500 to be paid to eligible micro-SMEs under the Prihatin Special Grant (GKP) 3.0 in mid-July 2021, the Government announced an additional payment of RM1,000 to eligible recipients under GKP 4.0 by two instalments of RM500 each to be paid in September 2021 and November 2021.

Further allocation for micro-businesses

To further support micro-businesses, the micro-credit financing programme will be continued with an additional funding of RM1.1 billion, to be funded by AgroBank (RM500 million), Bank Simpanan Nasional (BSN) (RM500 million), and National Entrepreneur Group Economic Fund (TEKUN) (RM100 million). This additional funding, together with existing funding available for 2021, means that RM3.0 billion of micro-credit financing is available to micro-businesses.

Automatic Loan Moratorium for micro-enterprises and individuals

A six-month loan moratorium will be granted to micro-enterprises (as well as individual borrowers from the B40, M40 and T20 segments of Malaysian society). There will be no requirement for these borrowers to show that they have lost their jobs or suffered a loss of income to be eligible for the moratorium.

Extension and improvements to PenjanaKerjaya programme

The PenjanaKerjaya programme that is due to end in June 2021 will be extended with several improvements, namely reducing the salary eligibility limit from RM1,500 to RM1,200 for the "Malaysianisation" programme to give more incentives to employers to replace foreign workers with local workers, and reducing the employment contract period from 12 months to six months for employees aged 50 and above, the disabled and former prisoners.

Human Resources Development Fund Levy

Employers who are unable to operate during the lockdown will be granted an automatic exemption from paying a levy to the Human Resources Development Fund for two months.

Employers from new sectors who are required to pay a levy to the Human Resources Development Fund as a result of the amendment to the Human Resources Development Fund Act 2001 will be exempted from paying the levy until December 2021.

Maintaining retail price of RON95 petrol, diesel and liquefied petroleum gas

The Government will maintain the retail price for RON95 petrol, diesel and liquefied petroleum gas (LPG), which is expected to involve subsidies of more than RM6.0 billion this year. This initiative will not only address the cost of living issue but also keep the cost of doing business from escalating.

Discounts on electricity bills

A discount on electricity bills ranging between 5% and 40% up to a maximum usage of 900 kilowatt-hours (kWH) a month will be given. This includes a 40% discount for usage below 200kWH, and a 15% discount for usage between 201kWH and 300kWH for three months from July 2021.

Further, businesses that are affected, in particular hotel operators, theme parks, convention centres, shopping malls, local airline offices and tour and travel agencies will be given a 10% discount on electricity bills for three months from October 2021 to December 2021.

Initiatives by Majlis Amanah Raya

Majlis Amanah Raya ("MARA") will extend the 30% discount on rental of MARA business premises until December 2021.

Approximately 9,000 MARA entrepreneurs affected by the Covid-19 pandemic will be allowed to defer the repayment of their MARA business financing for three months or reschedule their repayments by extending the repayment period by up to 36 months.

Small Entrepreneur Digitalisation Empowerment Programme

The Government will allocate RM200 million to assist micro-SMEs and RM100 million to assist SMEs under the Small Entrepreneur Digitalisation Empowerment Programme (PUPUK), for the following purposes:

  1. onboarding initiatives for the Shop Malaysia Online and Go-eCommerce;
  2. the RM100 million allocated to SMEs will be used under the SME Digitalisation Grant to allow SMEs to obtain matching grants of up to RM5,000 to purchase or subscribe for digital platforms;
  3. to encourage the participation of micro-SMEs in e-commerce platforms through the Small Entrepreneur Digitalisation Empowerment Programme spearheaded by the Malaysian Communications and Multimedia Commission (MCMC). In this regard, strategic collaboration between digital platform providers, telecommunication companies and community internet centres will be strengthened to assist rural entrepreneurs to go digital; and
  4. to empower agro-entrepreneurs, particularly in rural areas, to use the latest technology under the Agriculture Sector Digitalisation and Transformation Programme. The programme, which will be implemented through the collaboration of the Malaysia Digital Economy Corporation (MDEC) and the District Farmers Organisation, will identify potential farmers to transition to the new technology platforms.

Assistance for creative industry

A sum of RM100 million is provided in the form of financing facilities and fiscal support for the creative arts industry. The allocation includes incentives for the production of works and digital content, career opportunities, skills development programmes, contributions under the Social Security Organisation (SOCSO) as well as the procurement of products for the purpose of production on television, radio as well as the composition of songs.

Assistance for childcare centres and kindergartens

The Government will give a RM3,000 payment under the Bantuan Khas Taska to more than 4,400 operators of childcare centres under the supervision of the Ministry of Women, Family and Community Development and more than 8,000 operators of private kindergartens under the supervision of the Ministry of Education.

Assistance for school canteen operators

The Government will provide a financial aid of RM1,000 to all registered canteen operators.

Assistance for sports facilities operators

As operators of sports facilities, such as gymnasiums, bowling centres, futsal courts, will not be allowed to operate their facilities until the Third Phase of the NRP, the Government will provide a one-off payment of RM3,000 to each operator.

Assistance for tour agencies

To assist tour agencies to kickstart their business in the Third Phase of the NRP, the Government will provide a one-off payment of RM3,000 to more than 5,300 registered tour agencies.

Government contracts

Government procurement will be eased in the following manner:

  1. to permit variation of price (VOP) for projects until 31 December 2021 following the increase in costs of building materials;
  2. to assist local contractors in the G1 to G4 classes carrying out small-scale projects with the use of new schedule of rates for civil engineering and building works as well as schedule of rates for electrical works; and
  3. to allow extension of time or extension of contract for supply and service contracts that have been affected by the lockdown subject to the contractual provisions.

Tax relief for rental discounts for business premises

The Prime Minister confirmed the existing initiative that owners of buildings and business spaces who offer at least 30% rental discounts to businesses until 31 December 2021 will be granted a special deduction from income tax.

Tax-related reliefs

It was reiterated that the Government will defer payment of monthly tax instalments by companies and the exemptions from tourism tax and service tax on accommodations provided by hotel operators will continue until the end of this year.


Most of the business-related initiatives comprised in the Pemulih package are targeted at specific sectors or sub-sectors. The extent to which these measures will be sufficient to keep the beneficiaries afloat remains to be seen.

Equally worrying is whether small businesses that do not derive any benefit from the Pemulih package or the previous financial aid packages will survive the effects of the downturn caused by the Covid-19 pandemic.


1. Although the Prime Minister did not mention the facility, it is believed that he is referring to the Targeted Relief and Recovery Facility.

Originally published 29 June 2021

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.