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Government Announces RM10 Billion Stimulus Package Extension For SMEs

Government Announces RM10 Billion Stimulus Package Extension For SMEs

Malaysia’s Prime Minster, Tan Sri Muhyiddin Yassin today made an announcement to lessen the burden of Small and Medium Enterprises (SMEs).

Considering that SMEs employ 2/3 of the nation’s workforce and generate about 40% of the country’s economy, Muhyiddin said it’s important that the government expand the help that was given to the rakyat via the Bantuan Prihatin Nasional to business owners affected by COVID-19.

“Prihatin Tambahan” is an economic stimulus package aimed at SMEs worth RM10 billion to reduce the plight of enterprises and make sure that two-thirds of the nation’s workers don’t lose their jobs.

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Increase in wage subsidy program allocation

First, the allocation for the wage subsidy program announced on March 27 will be increased from RM5.9 billion to RM13.8 billion, an increase of RM7.9 billion.

Under this additional initiative, all companies with local workers earning RM4,000 and below will receive subsidized wage assistance as follows:

  • For companies with more than 200 employees, a subsidy of RM600 per employee is maintained. However, the maximum number of workers eligible for subsidies will be increased from 100 to 200 workers.
  • For companies with 76 to 200 employees, they will receive a subsidy of RM800 per employee.
  • For companies with up to 75 employees, they will receive a subsidy of RM1,200 per employee. Through these improvements, companies will receive more benefits and assistance.

This assistance is for 3 months and is for employers registered under the Companies Commission of Malaysia (SSM) or local authorities before January 1, 2020 and are registered with SOCSO.

It’s expected to benefit 4.8 million workers.

For employers who choose to receive this assistance, they are required to retain their employees for at least 6 months, within 3 months of receiving a wage subsidy and 3 months thereafter.

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PRIHATIN Special Grants

The Government will provide a Special Grant of RM3,000 to each micro company that will benefit nearly 700,000 micro SMEs nationwide.

Micro SMEs must register with the Inland Revenue Board (IRB) to enjoy this facility.

The Government has also called for lender organizations registered under the Lenders Act 1951 to provide credit facilities for a moratorium on SME installment payments for 6 months beginning April 2020, as provided by the bank.

To ensure SMEs fully benefit from all the announced benefits, the government announced a few initiatives:

1. Abolishing the 2% interest rate to 0% for the RM500 million Micro Credit Scheme under Bank Simpanan Nasional. The micro loan scheme for the micro company was also extended to TEKUN Nasional with a maximum loan limit of RM10,000 per company at 0% interest rate.

2. Excluding rental payments or provide rental discounts to SME retail dealers for premises owned by Government-linked companies and Muhyiddin also urged private premises owners to provide the same facilities at least during the MCO period and 3 months after the order ends.

Owners of buildings or business spaces that provide rentals or leases to renters of business premises will be given an additional tax deduction equal to the amount of the rent reduction for April 2020 to June 2020.

3. Allowing a 25% reduction levy payments involving foreign workers to all companies whose employee’s work permit expires from April 1 to December 31, 2020.

This reduction in levy payments does not apply to domestic workers.

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On retaining or reducing manpower

Touching on to retaining manpower, Muhyiddin said the government has agreed to encourage consultation between employers and workers on the terms of employment.

These include the option of pay cuts and the provision of unpaid leave during the MCO period.

Employers and employees can consult the Department of Labor for advice on any issues that may be resolved and any consultation should be subject to employment law in this country.

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Extension on submitting statutory documents

Considering the difficulties faced by companies in submitting statutory documents to meet the requirements of SSM during the MCO period, the government has agreed to grant a moratorium automatically within 30 days of the MCO’s last date for companies to submit.
In addition, the filing period for financial statements was also extended to 3 months from the date of the MCO. This flexibility is granted to companies with financial years ending September 30 to December 31, 2019.

However, businesses will need to apply for such relaxation from SSM and no late delivery fee will be charged on the application.

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