Former Prime Minister, Tun Dr Mahathir Mohamad has announced the 2020 economic stimulus package to mitigate the impact of the Covid-19 outbreak. The Malaysian government has allocated RM20 billion to boost the economy particularly on the businesses and tourism and travel industries. Let’s focus on the benefits the rakyat is getting from the economic stimulus package
Economic stimulus package highlighted that EPF cut to 7% from 11% at present
According to the ex prime minister, Tun Dr Mahathir Mohamad, the minimum Employees Provident Fund (EPF) contribution by employees will be reduced from 11% to 7% – effective from April 1 to Dec 31, 2020. However, Malaysians will still be able to maintain the EPF contribution.
Bantuan Sara Hidup recipients will receive the payment earlier that scheduled
Bantuan Sara Hidup recipients payment scheduled for May this year will be brought forward to March 2020. On top of that, recipients will receive an additional RM100 and it will be paid into the bank accounts of all BSH recipients in May 2020. Recipients will also get an extra RM50 that will be channelled in the form of e-Tunai.
In related to COVID-19
Government medical personnel will receive a special monthly critical allowance of RM400 who directly involved with containing COVID-19. For immigration staff and related front line staff, they will also receive a special monthly critical allowance of RM200.
To stimulate the tourism sector
The economic stimulus package also includes personal tax relief up to RM1,000 on expenditure related to domestic tourism. Eligible Malaysians will receive digital vouchers for domestic tourism (air and railways, and hotel accommodation) of up to RM100 per person. In all, RM500 million was allocated for the vouchers and tourism promotion.
In addition, taxi, tourist bus, registered trishaw drivers and tourist guides will receive a on-off RM600 payment. A 15% discount on monthly electricity bills would be extended to hotels, travel agencies, airlines, shopping malls, convention and exhibition centres. This benefit will also be enjoyed by hotels and travel-related companies where they would also be exempted from the Human Resource Development Fund levies.
Furthermore, they would be also exempted from the 6% service tax from March to August 2020. Businesses in the tourism sector are allowed to defer monthly income tax installment payments from April to September.
Bank Negara Malaysia will provide a special relief facility of RM2 billion in working capital for small and medium enterprises (SMEs) at an interest rate of 3.75%. RM200 million will be allocated for affected businesses that wish to get microcredit facilities at a rate of 4% from Bank Simpanan Nasional.
The Securities Commission Malaysia (SC) and Bursa Malaysia will waive listing fees for one year with immediate effect for companies looking to list on the LEAP Market or the ACE Market. Those with a market capitalisation of less than RM500 million that are aiming for a Main Market listing can also enjoy the benefit.
Companies affected by Covid-19 are allowed to revise profit estimates for 2020 with respect to the payments without penalty. All banks must restructure and reschedule loans for affected businesses and individuals.
Other highlights from the economic stimulus package:
- Up to RM100 million matching grant to HRDF to fund 40,000 employees from the tourism and other affected sectors.
- Employment Insurance Scheme will increase claimable training cost from RM4,000 to RM6,000 for affected sectors plus RM30 daily training allowance for trainees.
- Guidelines limiting the use of hotels by government agencies will be relaxed.
- Bank Negara to provide RM1 billion agro-food facility at 3.75 percent interest to promote food production for domestic and export demand.
- RM10 million for Federal Agricultural Marketing Authority (Fama) to provide food storage facilities to help reduce food prices.
- RM1,000 grants to 10,000 local entrepreneurs to promote the sale of their products on the e-commerce platform.
- RM20 million to Malaysian Digital Economy Corporation (MDEC) to transform Pusat Internet Desa into an e-commerce hub.
- Tax deduction of up to RM300,000 on renovation and refurbishment cost for companies.
- Import duty and sales tax exemption on importation or local purchase of machinery and equipment used in port operations for three years starting April 1.