COVID-19 & MCO: Stimulus Package For SMEs
April 6, 2020
A moment ago, the Prime Minister unveiled an additional economic stimulus package for the small and medium sized entities (SMEs). This latest plan worth RM 10 billion is intended to help SMEs and micro-businesses to cushion the impact of the Movement Control Order (MCO).
The key features of this package are:
• Expanded Wage Subsidy Additional RM 7.9 billion for the wage subsidy program announced on 27.3.2020. This wage subsidy will be given for 3 months. The subsidy will benefit SMEs with employees earning RM 4,000 or less and is available to all businesses registered under Companies Commission of Malaysia (CCM) or local authorities before 1.1.2020. SMEs are required to retain their employees for a minimum of 6 months i.e. during the 3 month subsidy period and 3 months after that.
Businesses with over 200 employees will receive a subsidy of RM 600 per employee as announced before but the limit on the number of employees has been increased to 200 from 100.
Meanwhile, businesses with 76 to 200 employees will receive RM 800 per employee and those with 75 or less employees will receive RM 1,200 per employee.
• The Creation Of PRIHATIN Special Grant A special grant worth RM 2.1 billion to benefit nearly 700,000 micro-SMEs nationwide, where each micro-SMEs is entitled to a grant of RM 3,000. The Government will obtain a list of eligible micro-SMEs from local authorities and CCM. To be eligible, the micro-SMEs are required to register with the Inland Revenue Board (IRB).
• Micro Credit Scheme Abolition of the 2% interest rate for the RM500 million Micro Credit Scheme under Bank Simpanan Nasional.
Meanwhile, the Micro Loan Scheme for micro-businesses is extended to Tekun Nasional with a maximum loan limit of RM 10,000 for each company at 0% interest. A sum of RM 200 million has been allocated for this purpose.
It must be noted that applicants are only allowed to choose one of the two schemes.
• Tax Relief For Rental Reduction Special tax deduction equivalent to the amount of rental reduction will be given to landlords who grant rental reduction to tenants from the SMEs sector. This tax deduction will be available between April and June 2020. Landlords must ensure that the rental reduction is at least 30%.
• Rental Exemption/Discount Rental exemption or discounts for SMEs whose premises are owned by Government-linked companies i.e. MARA, PETRONAS, PNB, PLUS and UDA.
• Foreign Workers Levy Foreign worker’s levy is reduced by 25% for businesses whose worker’s permit expires between 1.4.2020 and 31.12.2020.
• Extension Of Time An automatic moratorium of 30 days from the last date of MCO for companies to submit their statutory documents to CCM. Further, the period for filing of financial statements is extended by 3 months from the last date of MCO for companies with financial years ending 30.9.2019 to 31.12.2019. Companies need to apply for this concession from CCM and there will be no late filing fee imposed.