Azmi & Associates | View firm profile
Shortly after the announcement of the PRIHATIN stimulus package worth RM250 billion, the Government announced today that additional measures will be taken to help Malaysian Small and Medium Enterprises (‘SMEs‘) cope with the economic effects of the COVID-19 pandemic and Movement Control Order (‘MCO‘). The additional measures are as follows: –
(i) Enhanced Wage Subsidy Programme – RM7.9 billion
(ii) Special PRIHATIN Grant for Micro SMEs – RM2.1 billion
(iii) Removal of 2% interest rate under Micro Credit Scheme
(iv) Lowered Foreign Worker Levy
(v) Premises owned by Government Linked Corporations (‘GLCs’) will waive rental for Retail SMEs
(vi) Additional tax deduction for private sector landlords who reduce rental on business premises and buildings
(vii) Moratorium on the submission of statutory documents
(viii) Extension of Time (‘EOT’) for the submission of financial statements
Together these measures are designed to lower the running costs of SMEs while also helping them to maintain their current workforce.
Enhanced Wage Subsidy Programme
The Enhanced Wage Subsidy Programme is an augmentation to the previously announced wage subsidy programme.
Previous Wage Subsidy Programme
Enhanced Wage Subsidy Programme
|Subsidy amount||RM600 per eligible employee||201 and more employees – RM600 per employee
75 to 200 employees – RM800 per employee
74 employees or less – RM1200 per employee
|Max employees per employer||100||200|
|Aid period||3 months||3 months|
Employers may claim assistance under the Enhanced Wage Subsidy Programme subject to the following conditions:
- only applicable for employees earning RM4000 and below
- Retention of employees for at least 6 months, beginning from the start of the subsidy period
- Retained employees must not be given pay cuts
- Must not be compelled or instructed to take unpaid leave
- Not applicable for employers whose employees are claiming financial aid under the Employment Retention Programme– Implemented under the Social Security Organisation (‘SOCSO’). RM600 per month per employee for a maximum of 6 months (depending on the period of the No-Pay Leave notice issued by the employer), for employees who have been requested to take no-pay leave. Applicable to private sector employees who fulfil relevant conditions.
It is unclear if the employer still needs to show a loss of income of at least 50% since January 2020.
Special PRIHATIN Grant for Micro SMEs
This is a special grant of RM3,000 for eligible Micro SMEs who have registered with the Inland Revenue Board (‘IRB’).
SME Corporation Malaysia guidelines define Micro SMEs as enterprises (whether in manufacturing, services or other sectors) with an annual sales turnover of less than RM300,000 or less than 5 full-time employees. Though it is unclear if this definition will be used by the Government.
Removal of 2% Interest Rate under Micro Credit Scheme
The Bank Simpanan Nasional soft loans under the previously announced Micro Credit Scheme will now be offered with 0% interest (down from 2%) and without the need for collateral.
Micro Credit Scheme will also be extended to TEKUN Nasional (maximum RM10,000 loan per company, with 0% interest).
Lowered Foreign Worker Levy
Foreign worker levies have also been lowered by 25% for foreign workers with work permits expiring this year. This does not include foreign domestic helpers.
GLC Rental Waiver
SMEs renting GLC-owned business premises or offices will enjoy a waiver of rental or a discounted rental rate.
Tax Incentives for Private Sector Landlords
Private sector landlords who lower rental rates by at least 30% for SME tenants will be able to claim additional tax deductions. The amount of tax deduction will be equal to the reduction of rental from April 2020 to June 2020.
As with other tax deductions implemented in the past, it is likely that this deduction will be implemented via Gazette order. Though it must be noted that unlike the majority of previously gazetted double deductions, a reduction of rental is not a revenue expense but a reduction of income.
Moratorium on the submission of statutory documents
Suruhanjaya Syarikat Malaysia (‘SSM’) will automatically extend the deadline for the submission of statutory documents by 30 days from the end of the MCO.
Extension of Time (‘EOT’) for the Submission of Financial Statements
Upon application, SSM will allow companies a 3-month EOT for the submission of financial statements. The EOT applies to companies with financial years ending 30 September 2019 to 31 December 2019. Late submission fees will not be imposed.
Prepared by: Abu Daud Abd Rahim, Khairul Anwar Mohamed & Demetria Rinesha Samuel