Highlights of Supplementary Stimulus Package for SMEs in Malaysia
On 6 April 2020, Prime Minister Muhyiddin Yassin has announced a supplementary stimulus package specially targeted to support small and medium-sized enterprises (SMEs). This SME package is in addition to the RM250 billion economic stimulus announced on 27 March 2020.
Supplementary Stimulus Package Summary
Below are the highlights of the supplementary stimulus package:
- Additional allocation of RM7.9 billion for the 3-month wage subsidy programme introduced in previous stimulus package to companies, based on the number of employees. The qualifying wage threshold remains the same i.e. RM4,000 and below. The subsidy amounts are as follow:-
- RM1,200 for companies with employees of less than 75.
- RM800 for companies with employees between 75 to 200.
- RM600 for companies with employees more than 200.
- An additional condition is that companies must be registered with Suruhanjaya Syarikat Malaysia (SSM) or local authorities before 1 January 2020 and also registered with Social Security Organisation (SOCSO). The companies must also retain the employees for 6 months.
- A Special PRIHATIN Grant amounting to RM2.1 billion will be established for eligible micro-enterprises. A grant of RM3,000 will be provided to each company, benefitting almost 700,000 micro-enterprises. The company must be registered with IRB. The local authorities and SSM will provide the list of eligible micro-enterprises to Government.
- Interest is reduced from 2% to 0% on the RM500 million Micro Credit Scheme under Bank Simpanan Nasional. The soft loan scheme for micro-companies is also extended to TEKUN Nasional with a maximum loan limit of RM10,000 at 0% interest for each company. For this purpose, a sum of RM200 million will be provided. Applicants are allowed to choose either one of these schemes in order to benefit more micropreneurs.
- Further tax deduction effective from April to June 2020 will be given to private business premise owners that provide reduction or waiver of rental to SMEs. The rental reduction must be at least 30% of the original rental rate for that particular period.
- 25% reduction in foreign workers’ levy payments for all companies with work permits expiring from 1 April to 31 December 2020. This reduction is not applicable to domestic workers.
- The Government has agreed to encourage negotiations between employers and employees on employment terms including option of pay cuts and unpaid leave during the Movement Control Order (MCO) period. Employees and employers may refer to Department of Labour for advice on unresolved disputes. All negotiations must be in accordance to employment laws and regulations.
- The Government has agreed to grant an automatic 30 days moratorium from the last date of the MCO to facilitate the filing of statutory documents required by SSM. In addition, the deadline to submit financial statements also has been extended for 3 months from the last date of the MCO. This extension applies to companies with financial year-ends of 30 September to 31 December 2019. Nevertheless, Companies will need to apply for the extension from SSM, and no late charges will be imposed on these companies.