Government and institution measures in response to COVID-19.
Government and institution measures in response to COVID-19.
As of to-date, the Malaysian Government has unveiled an Economic Stimulus Package, PRIHATIN package, Additional PRIHATIN Package, National Economic Recovery Plan and Kita PTIHATIN Package worth RM20billion, RM230billion, RM10billion,RM35billion and RM10billion respectively to weather the impact of COVID-19.
(e.g. state compensation schemes, training…)
- Wage subsidies are given to employees with a monthly income below RM4,000 for 9 months (for a maximum number of 200 employees per company), subject to approval.
- 25% reduction of the foreign worker levy is given to all companies in respect of worker permits (excluding domestic helpers) which expire between 1 April 2020 and 31 December 2020.
- The Government has agreed to allow employers and employees to negotiate terms of employment including taking pay cuts and unpaid leave where the negotiations have to be based on employment laws in place.
Economic stimulus measures
(e.g. loans, moratorium on debt repayments…)
- There are additional allocations for the Micro Credit Scheme and relaxation of the application conditions for qualifying micro entrepreneurs.
- Moratorium on loans / financing repayments by financial institutions is available for 6 months from 1 April 2020 which has been extended for 3 months from 1 Oct 2020 for targeted group.
- A special grant of RM3,000 is given to each qualifying micro SME and the micro SME must register with the Malaysian Inland Revenue Board.
- Enhanced financing schemes are provided to SMEs as follows:
- Abolition of the 2% interest rate for the RM500 million Micro Credit Scheme under Bank Simpanan Nasional.
- Easy financing scheme is extended to the TEKUN Nasional Scheme with a fund of RM200 million at interest rate of 0%. The maximum loan amount is capped at RM10,000 for each micro company.
Businesses are only allowed to apply for either one of the above schemes.
- Rental waiver / discount is given to SME retailers renting premieses owned by Government-linked companies.
Recovery Plan Overview
- RM13.233 billion will be earmarked in empowering people to safeguard jobs, incentivise hiring, prop up income and support the transition towards the new norms of working and learning remotely.
- RM5.3b for Wage Subsidy Programme to promote employee retention and reduce layoffs. (Note: additional fund of RM2.4b has been announced on September 23rd 2020)
- RM1.5b for Hiring and Training Assistance for Businesses to encourage hiring of employees by providing financial incentives to employers.
- RM2b for Reskilling and Upskilling Programmes to enhance employability of the unemployed.
- RM0.075b for Gig Economy Social Protection and Skilling to promote the gig economy and provide a social safety net system for the gig economy and informal sector workforce.
- RM0.8b for Flexible Work Arrangement Incentives to encourage work-from-home arrangements by providing support to both employers and employees.
- RM0.2b for Child Care Subsidy to support working parents during the Conditional Movement Control Order period.
- RM0.2b for My30 Public Transport Subsidy to reduce the cost of daily public transportation.
- RM0.108b to provide social assistance to vulnerable groups such as disabled persons and single mothers.
- RM0.05b to support the healthcare needs of low-income groups.
- RM3b for Internet Connectivity for Education & Productivity to support e-learning and productivity activities by providing free internet connectivity.
- With a focus on low-income groups.
- RM9.655 billion will be allocated with the objective of sustaining operations, uplifting productivity and digitalisation, enhancing entrepreneurial activities and reviving consumer confidence.
- RM0.07b for Micros and Small and Medium Enterprises (“SMEs “) E-commerce Campaign to encourage adoption of e-commerce by micro enterprises and SMEs in order to widen their market reach.
- RM0.07b to encourage online consumer consumption through e-commerce vouchers.
- RM0.7b to assist as well as incentivise SMEs and mid-tier companies to digitalise operations and trade channels.
- RM0.005b to set up an online one-stop business advisory platform for the Micro enterprises and SMEs to enhance the outreach of the existing physical SME Hub.
- RM2b for PENJANA SME Financing to assist SMEs adversely impacted by COVID-19 in order to sustain business operations.
- RM1b for PENJANA Tourism Financing to finance transformation initiatives by SMEs in the tourism sector to remain viable and competitive in the new normal.
- RM0.4b for PENJANA Microfinancing to support micro enterprises through funding programmes.
- RM0.5b for Bumiputera Relief Financing to ensure sustainability of shariah compliant Bumiputera entrepreneurs through financial support.
- RM1.6b for SME Go-Scheme for Liquidity Support to provide liquidity for SME contractors to start delivering on Government projects.
- RM0.6b for tax relief for COVID-19 related expenses to encourage businesses to adapt to new norms and adhere to standard operating procedures (“SOPs”).
- RM2.4b to ease financial stress on businesses through remissions of penalties related to late tax payments.
- RM0.01b for Social Enterprises Elevation to encourage social enterprise related activity through contribution matching.
- RM0.3b to encourage the establishment of new businesses and transactions such as mergers and acquisitions.
- Cross-industry with a focus on financial support and digital transformation of micro enterprises and SMEs.
Stimulating the Economy
- RM12.162 billion will be allocated to provide targeted sectoral and systemic support to help businesses adapt and grow in the new norm operating landscape.
- RM1.2b for Dana Penjana Nasional to support digitalisation of Malaysian businesses by channelling funding from international investors into the local venture capital space.
- RM0.08b for Technology Innovation Sandbox to encourage innovation and creativity that can propel the digitalisation of service delivery.
- RM0.02b for Digitalisation of Government Service Delivery to enhance efficiency of government services delivery in light of new social distancing norms.
- RM0.02b for National “Buy Malaysia” Campaign to encourage the consumption of Malaysian-made products and services.
- Rm0.75b for ePenjana Credits in e-wallet to encourage e-wallet usage for safe, contact-free payment experience and to boost consumer spending.
- RM1b for incentive for property sector to stimulate the property market and provide financial relief to home buyers.
- RM0.897b for tax incentives for purchase of passenger cars to stimulate the automotive sector and provide financial relief to car buyers.
- RM0.02b in encouraging transition away from the traditional working hours concept of 9am to 5pm towards extended working hours on shifts-basis to maximise productive capacity while maintaining SOPs & new normal workplace best practices.
- RM0.05b for tax incentive to attract foreign companies to relocate their business into Malaysia by addressing the risk of re-shoring.
- RM1.8b for tax incentives to support the tourism sector during the COVID-19 period.
- RM0.225b to support the arts, culture, entertainment and event industries adapt to the new normal.
- RM0.4b to provide financial relief for agriculture and food players affected by COVID-1.
- RM0.2b to provide financial relief for commodity players.
- RM0.5b for sukuk Prihatin.
- RM5b Special Relief Facility at an interest rate of 3.5% to SMEs.
- Cross-industry with a focus on property sector, automotive sector, tourism sector, agricultural sector, commodity sector as well as arts, culture, entertainment and event industries.
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