Upcoming Stimulus Package
The Council is expecting the Malaysian government to announce a third stimulus package by March 31. The package is predicted to focus on protective measures for industries and individuals that have suffered a loss of income. We have heard that the government is open to receiving input from stakeholders on the forthcoming stimulus package. If there are any critical issues that should be addressed, please share your input with our Malaysia team by COB Thursday KL/Singapore. This input will be compiled by the Council and sent to the Ministry of Finance at the end of this week.
On March 16, Prime Minister Muhyiddin Yassin announced a second stimulus package, in addition to the $4.8 billion economic stimulus package announced on February 27 by former Prime Minister Mahathir Mohamad. The previous government’s stimulus package outlines a three-pronged approach of: easing the cash flow of affected businesses, assisting affected individuals, and stimulating demand for travel and tourism. The package includes plans for Bank Negara Malaysia to form a RM2 billion working capital relief facility for small and medium enterprises (SMEs) at a 3.75% interest rate, and for government-owned Bank Simpanan Nasional to divert RM200 million toward a microcredit facility that offers 4% interest rate financing to affected businesses.
The second stimulus package announced on March 16, focuses heavily on the tourism sector, which has been hit particularly hard by the COVID-19 outbreak. Between April and September 2020, businesses in the tourism sector can revise their 2020 profit estimates without penalty and defer monthly income tax payments. The package also includes: RM50 million in skills course subsidies for 100,000 Malaysians, reduction of the Employees Provident Fund (EPF) contribution by employees from 11% to 7%, and grants of RM1,000 to 10,000 to local entrepreneurs to promote e-commerce sales.
Movement Control Order Updates
The Movement Control Order (MCO), which is in effect from March 18 to March 31, is expected to be extended. On March 23, Prime Minister Muhyiddin announced that the National Security Council will meet on March 30 to decide on the governments' next steps in combating the spread of COVID-19. As of midnight, on March 24, the Ministry of International Trade and Industry's application for exemption for businesses producing essential goods and services was closed. The Ministry of Domestic Trade and Consumer Affair's application for food and e-trade supply operations also appears to be closed. If your company is facing serious issues under the MCO, or if your application for exemption has been denied or is still pending, please let our Malaysia team know.