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Combatting the impact of COVID-19:

MALAYSIA’S ECONOMIC STIMULUS

PACKAGES

1

TABLE OF CONTENTS

INTRODUCTION........................................................................................................................................... 2

WHAT YOU NEED TO KNOW? .............................................................................................................. 2

A. Individuals ....................................................................................................................................... 3

Civil Servants and Public Sector Employees ................................................................................... 3

Private Sector Employees ..................................................................................................................... 3

University Students ................................................................................................................................ 4

Insurance and Takaful Policy Holders ............................................................................................. 4

Retirees...................................................................................................................................................... 5

Patients ...................................................................................................................................................... 5

PTPTN and PTPK Loan Borrowers ................................................................................................. 5

Vulnerable Groups ................................................................................................................................. 6

E-hailing Drivers .................................................................................................................................... 6

Domestic Travellers ............................................................................................................................... 6

B. Families and Households .............................................................................................................. 7

C. Employers ........................................................................................................................................ 8

D. Small and Medium Enterprises (SMEs) ................................................................................... 9

E. Healthcare Sector Allocations and Benefits ......................................................................... 12

F. Tourism Sector Allocations and Benefits .............................................................................. 12

G. Commercial, Corporate, Industrial, Agricultural Sectors etc ......................................... 13

H. Telecommunications and Multimedia Sector....................................................................... 15

I. Additional Allocations and Benefits ....................................................................................... 15

HOW TO APPLY? ...................................................................................................................................... 17

How to Apply for Bantuan Prihatin Nasional? ................................................................................ 17

How To Apply For Wage Subsidy Programme? ............................................................................. 19

IMPORTANT DEADLINES..................................................................................................................... 20

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MALAYSIA’S ECONOMIC STIMULUS PACKAGE

INTRODUCTION

The Malaysian Government has announced the following economic stimulus

packages to mitigate the impact of COVID-19 outbreak and the mandatory Movement

Control Order (MCO) implemented on 18 March 2020:-

i) the Economic Stimulus Package 2020 announced by Yang Amat

Berhormat Tun Dr. Mahathir bin Mohamad on 27 February 2020;

ii) the Prihatin Rakyat Economic Stimulus Package announced by Yang Amat

Berhormat Tan Sri Dato’ (Dr) Haji Muhyiddin bin Haji Muhammad Yassin

on 27 March 2020; and

iii) the Additional PRIHATIN SME Economic Stimulus Package announced

by Yang Amat Berhormat Tan Sri Dato’ (Dr) Haji Muhyiddin bin Haji

Muhammad Yassin on 6 April 2020.

WHAT YOU NEED TO KNOW?

The Malaysian’s Economic Stimulus Packages are driven by three objectives:

first, to protect the people; second, to support businesses; and third, to strengthen the

economy. They are targeted at all social classes as we quote our Prime Minister, “no

one will be left behind”.

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A. Individuals

Civil Servants and Public Sector Employees

i) Special allowance of RM200 per month to military, policy, customs, civil

defence and RELA members who are directly involved in enforcing the

MCO effective 1 April 2020 until the end of COVID-19 outbreak;

ii) RM500 to civil servants of grade 56 and below:-

➔ Payment of RM500 will be made in April 2020;

iii) Special allowance of RM600 per month to healthcare staffs effective 1

April 2020 until the end of COVID-19 outbreak;

iv) Employees’ EPF contribution reduced to 7% with effect from 1 April 2020

to 31 December 2020:-

➔ Employees have an option to maintain their EPF contribution at 11%;

and

v) Members of EPF are allowed to withdraw a maximum of RM500 from

Account 2 on a monthly basis for a period of 12 months effective April

2020.

Private Sector Employees

i) RM800 to single individuals aged 21 and above, with income less than

RM2,000 per month:-

➔ Payment of RM500 will be made in April 2020; and

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➔ Payment of RM300 will be made in May 2020;

ii) RM500 to single individuals aged 21 and above, with income between

RM2,000 and RM4,000 per month:-

➔ Payment of RM250 will be made in April 2020; and

➔ Payment of RM250 will be made in May 2020; and

iii) Employees’ EPF contribution reduced to 7% with effect from 1 April 2020

to 31 December 2020; and

iv) Members of EPF are allowed to withdraw a maximum of RM500 from

Account 2 on a monthly basis for a period of 12 months effective April

2020.

Students

i) RM200 to students at various levels of tertiary education, including STPM,

matriculation and community colleges, polytechnics, diploma as well as

public and private higher learning institutions:-

➔ Payment of RM200 will be made by the end of April 2020.

Insurance and Takaful Policy Holders

i) Special fund of RM8 million to cover COVID-19 screening fees;

➔ Up to RM300 per policy holder and takaful medical certificate to

undergo COVID-19 screening at private hospitals or laboratories, as

instructed by MOH; and

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ii) Family Takaful and insurance companies will offer a 3-month suspension

on premiums by contributors whose source of income is affected by the

pandemic.

Retirees

i) Pre-retirement withdrawals from Account B up to RM1,500 per member

of the Private Retirement Scheme without any tax penalties between April

and December 2020; and

ii) RM500 to government pensioners:-

➔ Payment of RM500 will be made in April 2020.

Patients

i) Patients hospitalised under mySalam, including those infected with

COVID-19, are allowed to claim income replacement fee of RM50 per day

for a maximum of 14 days; and

ii) B40 patients who are quarantined as Patients under Investigation (PUI) are

allowed to claim income replacement fee of RM50 per day for a maximum

of 14 days.

PTPTN and PTPK Loan Borrowers

i) Deferment of PTPTN loan repayment for all borrowers for 6 months from

1 April 2020 to 30 September 2020; and

ii) Deferment of PTPK loan repayment for all borrowers for 6 months from 1

April 2020 to 30 September 2020.

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Vulnerable Groups

i) RM25 million to provide food assistance, healthcare and shelter to

vulnerables such as the elderly and children in shelters, the disabled, the

homeless and orang asli.

E-hailing Drivers

i) RM500 to e-hailing drivers.

Domestic Travellers

i) Special personal income tax relief of up to RM1,000 to resident individuals

for domestic travelling expenses incurred between 1 March 2020 to 31

August 2020:-

➔ Expenses eligible for tax relief are:-

o Accommodation fees on a tourist accommodation premises

registered with the Ministry of Tourism, Arts and Culture

Malaysia; and

o Entrance fees to tourist attractions;

➔ Effective for year of assessment 2020 only; and

ii) Digital vouchers of up to RM100 per person for domestic travelling.

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B. Families and Households

i) RM1,600 to households with income less than RM4,000 per month:-

➔ Payment of RM1,000 will be made in April 2020; and

➔ Payment of RM600 will be made in May 2020;

ii) RM1,000 to households earning between RM4,000 and RM8,000 per

month:-

➔ Payment of RM500 will be made in April 2020; and

➔ Payment of RM500 will be made in May 2020;

iii) 6-month rental exemption for B40 group who are living in the Project

Perumahan Rakyat (PPR) and Perumahan Awam;

iv) 6-month moratorium for rent payment for rent-to-own (RTO) units

effective April 2020;

v) 6-month moratorium for rent payment for Public Housing;

vi) 6-month tiered-discount for electricity bills with rates ranging between 15%

and 50% according to electricity usage with a maximum limit of 600kWh

per month effective April 2020:-

➔ 50% discount for electricity consumption below 200kWh;

➔ 25% discount for electricity consumption between 201 – 300 kWh;

➔ 15% discount for electricity consumption between 301 – 600 kWh;

and

➔ 2% discount for electricity consumption between 600kWh and above.

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C. Employers

i) Wage Subsidy Programme to assist employers in Small and Medium

Enterprises (SMEs) in retaining employees:-

Total Number of Employees of the

Company

Subsidy per

month (Up

to 3 months)

Maximum Number of

Eligible Employees

More than 200 employees RM600 200

76 to 200 employees RM800 -

75 or fewer employees RM1,200 -

➔ Wage subsidy for 3 months effective 1 April 2020 or from the date of

application;

➔ Only available for employees with salary less than RM4,000 per

month;

➔ Employers with more than 75 employees must demonstrate that their

businesses have a reduction in income of at least 50%; and

➔ Employees must continue to be retained and must not suffer pay cuts

or be required to take unpaid leave for at least 6 months;

ii) Payment of salaries by the Malaysian Government to workers involved in

service contracts such as cleaning and supplying food in schools, public

higher learning and training institutions, as well as other government

agencies, including statutory bodies;

iii) Extension of Government’s contracts with service contractors by one

month;

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iv) Employer Advisory Services (EAS) programme will be implemented by

Kumpulan Wang Simpanan Pekerja (KWSP) effective 15 April 2020:-

➔ Includes options for deferral of payments, restructuring and

rescheduling of employer contributions;

v) Foreign worker levy will be reduced by 25% for work permits that expire

between 1 April 2020 to 31 December 2020;

vi) Deadline to submit statutory documents to SSM is extended automatically

by 30 days from the end date of the MCO; and

vii) Deadline to submit financial statement is extended such that the deadline

is three months from the end date of the MCO.

D. Small and Medium Enterprises (SMEs)

i) Increasing funds to the Special Relief Facility (SRF) for SMEs by RM3

billion, thus bringing the total to RM5 billion:-

➔ Reduction of interest rate for Special Relief Facility from 3.75% to

3.5%;

ii) Increasing the size of the All Economic Sector Facility Fund by RM 1

billion, thus bringing the total to RM6.8 billion to enhance access to

financing for SMEs;

iii) Providing RM2.1 billion to fund the “Prihatin Special Grant”:-

➔ Special grant of RM3,000 to each qualifying micro SME; and

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➔ All micro SMEs are required to register with the Inland Revenue

Board to be eligible for this special grant;

iv) Providing additional funds of RM500 million under the Micro Credit

Scheme, to a total of RM700 million for soft loans:-

➔ Administered by Bank Simpanan Nasional at a 0% interest rate;

➔ Loan eligibility requirements relaxed to a minimum of 6-month

operation;

➔ Maximum financial amount increased to RM75,000 for each

entrepreneur;

v) Micro Credit Scheme extended to TEKUN Nasional, with a maximum

loan limit of RM10,000 per company, at a 0% interest rate:-

➔ Applicants can only choose between Micro Credit Scheme for soft

loans OR Micro Credit Scheme for TEKUN Nasional;

vi) SMEs with business records of less than 4 years can leverage the BizMula-

I and BizWanita-I schemes for financing up to RM300,000 under Credit

Guarantee Malaysia Berhad (CGC):-

➔ SMEs may refer to IMSME.com.my to apply for loans and schemes

proposed under the ESPs;

vii) Syarikat Jaminan Pembiayaan Perniagaan (SJPP) will provide RM5 billion

worth of guarantees and increase guarantee coverage from 70% to 80% for

SMEs;

viii) Exempt payment for Human Resources Development Fund (HRDF) levy

for all sectors for a period of 6 months effective April 2020;

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ix) Automatic deferment of CP204 tax instalment payments for a period of 3

months effective 1 April 2020;

x) Automatic deferment of CP500 tax instalment payments for a period of 3

months effective 1 April 2020;

xi) Grants of RM1,000 each to 10,000 local entrepreneurs to promote sale of

their products on ecommerce platforms;

xii) Deduction is given for the renovation and refurbishment expenditure up to

a limit of RM300,000:-

➔ The deduction will not be given if the expenditure is claimed as an

allowance under Schedule 2 or Schedule 3 of the Income Tax Act

1967; and

➔ Effective for expenditure incurred from 1 March 2020 to 31

December 2020;

xiii) Expenditure incurred by companies in providing employees with

disposable personal protective equipment (PPE) such as facemasks is

deductible under section 33(1) of the Income Tax Act; while expenditure

incurred by providing non-disposable PPE to employees can be claimed as

capital allowance;

xiv) 6-month moratorium to loans from TEKUN, MARA and cooperatives and

other government agencies providing financing to SMEs; and

xv) Rental exemptions or discounts to SMEs renting properties owned by

Government-linked companies such as MARA, PETRONAS, PNB, PLUS,

UDA and several other State Government-owned companies.

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E. Healthcare Sector Allocations and Benefits

i) RM500 million to the Ministry of Health; and

ii) RM1 billion to purchase equipment and services to contain COVID-19,

including obtaining medical expertise from private healthcare services.

F. Tourism Sector Allocations and Benefits

i) 15% discount on electricity bills for tourism premises for 6 months

effective April 2020;

ii) Automatic deferment of CP204 tax instalment payments for a period of 3

months effective 1 April 2020;

iii) Exemption from HRDF levies for hotels and travel related companies;

iv) 6% service tax exemption for hotels, effective from March to August 2020;

v) Rebates on rental for premises at the airport as well as landing and parking

charges;

vi) Double deduction on expenses incurred on approved tourism-related

training;

vii) Relaxation of existing government guidelines limiting use of hotels;

viii) Revision of tax estimate for 2020 with respect to monthly tax instalment

payments without imposition of penalty:-

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➔ Application for revision of tax estimate has to be made online to the

Inland Revenue Board of Malaysia; and

➔ Effective for applications made from 1 March 2020;

ix) Hotel and other accommodation operators will be given exemption from

charging service tax on their accommodation and related services provided

for a period of 6 months from 1 March 2020 until 31 August 2020;

x) Double deduction on training expenditure incurred by qualifying hotel and

tour operating businesses for courses approved by the Ministry of Tourism,

Arts and Culture; and

xi) Expenditure incurred by companies in providing employees with

disposable personal protective equipment (PPE) such as facemasks is

deductible under section 33(1) of the Income Tax Act; while expenditure

incurred by providing non-disposable PPE to employees can be claimed as

capital allowance.

G. Commercial, Corporate, Industrial, Agricultural Sectors etc

i) 2% discount on electricity bills for 6 months effective April 2020;

ii) Allowed to revise the tax estimates in the third, sixth and ninth instalments

during the basic accounting period;

iii) Banking institutions urged to offer a 6-month moratorium, conversion of

credit card balance to term loans and restructuring of corporate loans;

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iv) Bank’s income from interest or profit from loans or financial involved with

moratorium will only be taxable when the income is received after the

moratorium period;

v) RM50 billion guarantee scheme to corporate sectors with a guarantee of up

to 80% of loan amount for the purpose of financing working capital with

the following requirements:-

➔ Managed and subject to credit evaluation by Danajamin;

➔ Minimum loan size is RM20 million per business; and

➔ Available for application from 1 May to 31 December 2020 or until

the fund is fully utilised;

vi) Import duty and sales tax exemption on importation or local purchase of

machinery and equipment used in port operations for 3 years commencing

01 April 2020:-

➔ This exemption does not apply to the importation or purchase of spare

parts and consumables including those that are used for maintenance

purposes;

➔ Applications for exemption have to be submitted to the Ministry of

Finance from 1 April 2020 to 31 March 2023;

vii) Waiving of listing fees by SC and Bursa for 1 year, for companies seeking

listing on LEAP, ACE and Main Market (applies to companies with market

capitalisation of < RM500million); and

viii) Expenditure incurred by companies in providing employees with

disposable personal protective equipment (PPE) such as facemasks is

deductible under section 33(1) of the Income Tax Act; while expenditure

15

incurred by providing non-disposable PPE to employees can be claimed as

capital allowance.

H. Telecommunications and Multimedia Sector

i) Free internet to all customers effective 1 April 2020 until the end of MCO;

ii) RM400 million invested to widen network coverage and capacity; and

iii) Expenditure incurred by companies in providing employees with

disposable personal protective equipment (PPE) such as facemasks is

deductible under section 33(1) of the Income Tax Act; while expenditure

incurred by providing non-disposable PPE to employees can be claimed as

capital allowance.

I. Additional Allocations and Benefits

i) 6-month lease exemption on all premises owned by agencies and statutory

bodies of the Federal Government such as school canteens, nurseries,

cafeterias, convenience stores etc;

ii) RM 1 billion to Food Security Fund;

iii) RM100 million for the development of infrastructure for food storage and

distribution as well as crop integration programme;

iv) Special funds between RM100,000 and RM200,000 too each viable

Pertubuhan Peladang Kawasan (PPK) and Pertubuhan Nelayan Kawasan

(PNK) to develop short-term agrofood projects that can generate income

within 3 to 6 months;

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v) RM2 billion to improve social facilities such as improving roads,

upgrading dilapidated schools in Sabah and Sarawak, cleaning police

stations etc; and

vi) RM2 billion for small projects such as infrastructure projects in FELDA

and other areas, upgrading dilapidated schools in Sabah Sarawak and

upgrading Perumahan Rakyat Termiskin.

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HOW TO APPLY?

How to Apply for Bantuan Prihatin Nasional?

1. If you are a recipient of Bantuan Sara Hidup

➔ YOU DON’T NEED TO APPLY

➔ You can check your status from 1 April 2020 by going to the following

websites:-

i) Inland Revenue Board of Malaysia (LHDN)

http://www.hasil.gov.my

ii) Bantuan Sara Hidup (BSN) http://bsh.hasil.gov.my

iii) Ministry of Finance http://www.treasury.gov.my

2. If you are a taxpayer and have registered with the Inland Revenue Board of

Malaysia (LHDN)

➔ YOU DON’T NEED TO APPLY

➔ However, please be reminded to update your income tax profile e.g. your

bank account number:-

i) Go to http://www.hasil.gov.my

ii) Select E-kemaskini

iii) Select Profil Diri

iv) Update

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➔ Similarly, you can check your status from 1 April 2020 by going to the

following websites:-

i) Inland Revenue Board of Malaysia (LHDN)

http://www.hasil.gov.my

ii) Bantuan Sara Hidup (BSN) http://bsh.hasil.gov.my

iii) Ministry of Finance http://www.treasury.gov.my

3. If you are none of the above, application will be opened from 1 April 2020. You

can go to any of the following websites to apply:-

i) Inland Revenue Board of Malaysia (LHDN) http://www.hasil.gov.my

ii) Bantuan Sara Hidup (BSN) http://bsh.hasil.gov.my

iii) Ministry of Finance http://www.treasury.gov.my

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How To Apply For Wage Subsidy Programme?

1. If you are:-

i) an employer; and

ii) your employees have income less than RM4,000;

➔ You are eligible to apply for a three-month wage subsidy for your

employees by going to the Perkeso website at

http://prihatin.perkeso.gov.my from 9 April 2020 onwards

➔ Application has to be made on or before 15 September 2020

➔ The following documents are needed for application:-

i) List of employees;

ii) Employer’s bank details (front page of bank statement) and the

Business Registration Number used for the opening of this bank

account;

iii) Copies of the registration with the SSM / ROS / ROB / Authorities

for Professional, Scientific or Technical Services;

iv) PSU50 Declaration Acount; and

v) Supporting documents such as financial statement or sales report

affirmed by the management or any other relevant documents (FOR

MEDIUM AND LARGE ENTERPRISES ONLY).

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IMPORTANT DEADLINES

Credit to YHC Advisory PLT @ YHC Tax Sdn Bhd