PRIHATIN SME Economic Stimulus Package 3.0 - Additional Measures for SMEs
Just 1 week after the announcement of the 2nd Economic Stimulus Package (PRIHATIN Package), a 3rd package worth RM10 billion has just been announced by our Prime Minister. This is specifically catered to the Small and Medium-sized Enterprises (SMEs). The swift action shows that the government took heed of the recommendations put forth by businesses affected by the COVID-19 pandemic.
The additional measures announced are timely. Aimed at assisting SMEs tide through challenging times, they include enhanced wage subsidies, waiver of rental, and loan and grant schemes among others. Other measures to smoothen the implementation and delivery of the stimulus package were also announced.
While they are aimed to address immediate concerns, we look forward to seeing the government rolling out medium to long term strategies, to ride the country out of this crisis and capture the opportunities available.
As the saying goes, “There are opportunities in every crisis”. We must act and adapt quickly, so that we are better able to seize the opportunities when this crisis is over. Echoing our Prime Minister’s call to all Malaysians – let us strengthen our resolve and stay committed in our fight against COVID-19!
Stay well and safe everyone!
With the increased wage subsidy from RM5.9 billion to RM13.8 billion (increase of RM7.9 billion), all companies with local workers earning of RM4,000 and below will receive subsidised wage assistance as follows:
|No of employees employed by Company||Subsidy amount (RM)|
|> 200 employees||RM600 subsidy per employee is maintained. For companies that employ more than 200 people, the number of workers eligible for subsidy is increased from 100 to 200.|
|Between 76 to 200 employees||RM800 subsidy per employee.|
|Up to 75 employees||RM1,200 subsidy per employee.|
Eligible employers under the wage subsidy programme must retain their employee for at least six months (3 months of receiving a wage subsidy, and 3 months thereafter).
Note: The programme was first introduced in the PRIHATIN package unveiled on 27 March 2020. One of the conditions is that the eligible employer must have suffered 50% loss in revenue since January 2020. This condition, however was waived under the Enhanced Wages Subsidy Program announced on 6 April 2020 exclusively for small SMEs with employees up to 75 people.
Private premises owners are encouraged to reduce or waive rental during the Movement Control Order (MCO) period, up to 3 months after the MCO ends. Landlords who reduce (at least 30% of the original rental) or waive the rental on business premises rented to SMEs will be given a tax deduction, equal to the amount of the rental waived or reduced for April 2020 to June 2020.
The Government has agreed to allow employers to negotiate with their employees on the terms of employment, including the implementation of pay cuts and the option of unpaid leave during the MCO period. Employers and employees can consult the Department of Labor for advice on any issues that may arise. All consultations will be subject to the employment law in Malaysia.
The Government will be abolishing the 2% interest rate for the RM500mil Micro Credit Scheme under Bank Simpanan Nasional. The Micro Credit Scheme for micro-SMEs is also extended to loan under TEKUN Nasional with a maximum borrowing of RM10,000 per SME at 0% interest. Applicants can only choose from one of these schemes – either under Bank Simpanan Nasional or TEKUN Nasional.
Government-Linked Companies (GLCs) such as MARA, PETRONAS, PNB, PLUS and UDA as well as some State Government companies have agreed to waive or reduce rental on their premises, especially for SME retailers.
A 25% reduction in foreign employee’s levy payments is given for work permits expiring between the period of 1 April 2020 and 31 December 2020. This reduction in levy does not apply to domestic helpers.
The Government will provide a Special Grant of RM3,000 to each eligible micro-SME. To enjoy this incentive, micro-SMEs must register with the Inland Revenue Board of Malaysia (IRBM). The Government will obtain a list of eligible SMEs from local authorities and the Companies Commission of Malaysia (CCM).
Our commentary: While the term micro-SME is not defined in the speech, micro-SME is defined by SME Corporation Malaysia as “a micro enterprise with sales turnover of less than RM300,000 or employees of less than 5”.
The deadline for submission of statutory documents to CCM due during the MCO period has been extended to 30 days from the last day of the MCO period. Extension of time (EOT) is also given for filing of the annual financial statements with the CCM. Companies with financial years ending 30 September 2019 to 31 December 2019 are given an extension of 3 months from the last date of the MCO period to file their annual financial statements with CCM. Company will need to apply for such extension from CCM. No late submission penalty will be imposed.
Note: The IRBM has extended the submission deadline for a company’s income tax return form (RF) for the year of assessment (YA) 2019.
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