Putrajaya unveils fresh RM10b stimulus package for SMEs

PM Muhyiddin says 4.8m employees are expected to benefit from the wage stimulus initiative

by ASILA JALIL/ pic by RAZAK GHAZALI

THE government has announced an additional RM10 billion under the Prihatin Rakyat economic stimulus package to assist small and medium enterprises (SMEs) and micro organisations pay and retain their employees as the country faces recessionary pressures due to the Covid-19 pandemic.

Prime Minister Tan Sri Muhyiddin Yassin said the additional measures were introduced following responses he received from SMEs and micro businesses badly hit by the pandemic and requiring additional assistance from the government.

“Among the main challenges faced by them were related to the business cashflow following the implementation of the Movement Control Order (MCO). Besides, SMEs are also faced with bureaucratic and administration issues that impede their immediate access to the assistance provided by the government under the Prihatin package,” Muhyiddin said in a televised address yesterday.

The measures announced include a RM7.9 billion increase in the Wage Subsidy programme, bringing the total allocation to RM13.8 billion from RM5.9 billion previously. This initiative applies to companies with local employees that earn RM4,000 and below.

The wage subsidy amounting RM600 for each employee in a company that employs more than 200 people is now available for up to 200 employees instead of 100 previously.

As for companies with 76 to 200 employees, Muhyiddin said the companies will receive a wage subsidy of RM800 for each employee, while companies with less than 75 employees will receive a wage subsidy of RM1,200 for each employee.

He said the initiative will be for three months and is restricted to employers who have registered with the Companies Commission of Malaysia (SSM) or local authorities before Jan 1, 2020, and are also registered with the Social Security Organisation or Socso.

“To employers who have chosen to receive this aid, they are required to retain their employees for at least six months, which is within three months of receiving the wage subsidy and three months thereafter,” he said, adding that 4.8 million employees are expected to benefit from the wage stimulus initiative.

The government has also created a Prihatin Special Grant amounting to RM2.1 billion for all qualified micro SMEs.

Muhyiddin said the government will prepare a Special Grant of RM3,000 for every micro company, which will benefit almost 700,000 micro SMEs nationwide that are registered with the Inland Revenue Board.

Putrajaya has also urged registered money-lending organisations under the Moneylenders Act 1951 that provide credit facilities to give a moratorium on SME instalment payments for six months beginning April 2020.

To ensure SMEs can fully benefit from the measures announced, the government will also abolish the 2% interest rate to 0% for the Micro Credit Scheme totalling RM500 million under Bank Simpanan Nasional.

“The micro-loan scheme for micro companies is also extended to Tekun Nasional with a maximum loan limit of RM10,000 per company at an interest rate of 0%.

“For this purpose, a sum of RM200 million will be prepared. Applicants can only choose either one of the schemes to enable more businesses to enjoy this benefit,” said Muhyiddin.

The government will also exclude rental payments or provide rental discounts to SME retailers operating on premises that are owned by government-linked companies.

Similarly, Muhyiddin urged owners of private premises to also provide the same assistance by reducing the rental rate at least during the MCO period and three months after it ends.

He added that building or retail space owners that provide the reduction or rental exemption for SMEs will be given additional tax deduction equivalent to the reduction amount for the months of April until June 2020.

“The additional tax deduction is subject to the terms of the rental reduction, which should be at least 30% of the original rent for that period.”

He said a 25% reduction in levy payment for foreign workers is also allowed for companies with work permits that expire on April 1 until Dec, 31, 2020. It is, however, not applicable to housemaids.

The government has agreed to negotiations between employers and employees on the terms of their employment, which includes the options to deduct salaries and unpaid leave during MCO.

Muhyiddin also noted the difficulties faced by companies in submitting their statutory documents to SSM during MCO and thus the government has granted an automatic 30-day moratorium, effective from the last date of the MCO, for companies to make the submission to SSM.

The filing period of a company’s financial statements is also extended for three months from the last date of the MCO. This is given to companies with financial year ending Sept 30 until Dec 31, 2020.

Muhyiddin said the government will table the Supplementary Supply Bill for all the economic stimulus packages that were announced.

“I assure you the government will always be transparent in its spending and all the actions taken are in accordance with the provisions of the law and the federal constitution,” he said.