RM20 Billion Economic Stimulus Package 2020 Unveiled in Malaysia
Malaysia Government Unveil RM20 Billion Economic Stimulus Package to Offset Covid-19
The Government has announced a RM20 billion Economic Stimulus Package 2020 to offset the economic impact from Covid-19 fallout.
To mitigate the impact on the Malaysian economy, the Economic Stimulus Package 2020 is meant to target three core areas:
- To offset the impact of the Covid-19
- To encourage more quality investments into the country
- To boost the “people-based” growth prospects
RM200 million micro credit facility will be provided by Bank Simpanan Nasional (BSN) at an interest rate of 4%. BSN will also be providing RM2 billion guaranteed financial aid for SMEs at an interest rate of 3.75%.
Banks in Malaysia will be postponing or rescheduling payments of loans in effort to minimise the monetary burden. For a temporary period of 6-months, airlines, shopping centres, tourism agencies and hotels will enjoy a 15% discount on their electricity bills.
Due to the impact of the Covid-19, all tourism-based companies will be allowed to postpone their monthly income tax instalments. Additionally, Malaysia Airports Holdings Berhad (MAHB) will be cutting its rental rates for tenants. It will also cut the landing charges and parking fees at the airport. Hotels will be receiving a break from service taxes beginning March 2020 until August the same year.
The Government is calling on everyone in the affected industries to do their part. For example, shopping malls should reduce the cost of rental while hotels should offer discounts.
EPF contributions in Malaysia by the employees will be reduced from 11% to 7% and the changes will be effective 1 April until 31 December 2020. This move is expected to unlock nearly RM10 billion in private consumption. Malaysia employees have the option to opt out of the scheme and maintain the contribution rates.
Grants and Tax Exemptions
Recipients of the Bantuan Sara Hidup (BSH) will have their regular RM200 payment schedules brought forward from May 2020 to March 2020. An additional RM100 will be paid into bank accounts of all BSH recipients in May 2020 and an additional RM50 will be given via e-tunai.
Local entrepreneurs in Malaysia will be given RM1,000 to RM10,000 in grants to help marketing their business on e-commerce sites.
Bursa Malaysia and the Securities Commission Malaysia (SSM) is set to waive the required listing fee for a year for the companies that are seeking to list on the Access, Certainty, Efficiency (ACE) or Leading Entrepreneur Accelerator Platform (LEAP) market. Companies with market capitalisation less than RM500 million that are seeking to list on the Main Market will also be eligible for this waiver.
There will be exemptions on sales tax and import duties for the import of machinery and equipment used in port operations. This exemption will be provided for a period of three years and commence on 1 April 2020.
As of now, Malaysia expects economic growth this year to range between 3.2 – 4.2%. Fiscal deficit is expected to rise to 3.4% of the GDP from its original target of 3.2% as a result of this stimulus package.