Malaysia Government has announced a RM20 Billion Fiscal Stimulus Package on 27 February 2020. Cheng & Co’s team have highlighted all the important points below:
HIGHLIGHTS AT A GLANCE…
1. Deferment of monthly tax instalments for a period of 6 months for businesses in the tourism industry.
2. Tax deductions of up to RM300,000 for renovation costs incurred on business premises.
3. Contributions by employees to Employees Provident Fund is reduced to 7% from 11%.
4. Revision of monthly tax instalments is allowed to be made in the third month of instalment payments.
MEASURE 1: RESTRUCTURING & RESCHEDULING OF LOANS
- Bank Negara has been tasked to ensure all financial institution provide due assistance to those businesses and individuals have been affected.
- Stamp duty 100% exemption for loan agreements arising from such restricting and rescheduling of business loans.
Period: 1 March 2020 to 31 December 2020
MEASURE 2: SPECIAL RELIEF FACILITY(SRF) FOR COVID – 19
- Bank Negara will establish RM2 billion Special Reliefs Facility offer through commercial banks for working capital to SMEs.
- Interest rate 3.75%.
- Tenure offered can be up to 5.5 years including 6 months payment moratorium.
- Loan size maximum can be RM1 million to each SME.
MEASURE 3 : BANK SIMPANAN NASIONAL(BSN) MICRO CREDIT FACILITY
- BSN offer a RM200 million micro-credit scheme for tourism and other affected sectors at interest rate 4%.
- Repayment only begins after 6 months of disbursement of the loan.
MEASURE 4 : DEFERMENT & REVISION OF INCOME TAX ESTIMATION
- Tourism businesses such as travel agencies, hotels, airlines will be given deferment of their monthly tax instalment for 6 months.
From 1 April 2020 to 30 September 2020
- Other affected businesses are allowed to revise the estimated monthly tax instalment earlier on 3rd month only if the 3rd month falls in the year 2020.
MEASURE 5: SERVICE TAX EXEMPTION FOR HOTELS
- Service Tax exemption to Hotels (Group A First Schedule of Service Tax Regulation 2018) on taxable services.
Period: 6 months from 1 March 2020 to 31 August 2020
MEASURE 6: TAX DEDUCTION ON EQUIPMENT PROVIDED TO EMPLOYEES
- Tax deduction is given on those expenses incurred on disposable Personal Protective Equipment (PPE) that employer provided to employee such as face masks etc.
- For non-disposable PPE can be claimed as capital allowance.
MEASURE 7: FURTHER DEDUCTION TO HOTEL OPERATOR FOR TRAINING EXPENSES
- Training approved by the Ministry of Tourism, Arts and Culture (MOTAC) .
- Given double deduction.
MEASURE 8: EXEMPTION FROM HUMAN RESOURCES DEVELOPMENT FUND(HRDF) LEVY
- 8 categories of business – Air travel, domestic ground transport, convention centres, shopping malls, travel tour operators, hotels, franchises and hypermarkets.
Period: 6 months from 1 April 2020 to 30 September 2020
MEASURE 9: ELECTRICITY DISCOUNT OF 15% AND MAHB REBATE
- 6 categories of business – Hotel operators, travel agencies, local airlines offices, shopping malls, conventions centres and theme parks.
- Malaysia Airport Holdings Berhad (MAHB) will provide rebate for rental of premises at the airport, landing and parking charges.
Period: 6 months from 1 April 2020 to 30 September 2020
MEASURE 10: REVIEW ON CONDITION FOR PURCHASE OF DUTY-FREE GOODS FOR PERSONS ENTERING MALAYSIA
- Eligibility period for purchase duty-free goods reduced from 72 hours to 48 hours
- Threshold increase from RM500 to RM1,000
- Effective date 1 April 2020
MEASURE 11: SPECIAL INCOME TAX RELIEF ON DOMESTIC TRAVEL
- Special income tax relief up to RM1,000 to individual.
- For expenses incurred on domestic tourism on
- – Accommodation at premises registered with Ministry of Tourism, Arts and Culture Malaysia (MOTAC)
- – Entrance fee to tourist attractions
Period: From 1 March 2020 to 31 August 2020
MEASURE 12: STIMULATING DEMAND FOR TOURISM THROUGH DISCOUNT VOUCHERS & TOURISM PROMOTION
- Travel discount vouchers
Government will collaborate with operators of air travel, hotel and resort accommodation booking sites to offer discount vouchers up to RM100 per person.
- Galakan Melancong Malaysia (GAMELAN) Matching Grant
It was implemented in 2019 through public-private collaboration on tourism promotion provide greater flexibility.
- Tourism Promotion
Tourism Malaysia will set up to other key markets like ASEAN, Middle East, Europe and South Asia Additional allocation of RM30 million fund to Tourism Malaysia.
MEASURE 13: GOVERNMENT USE OF HOTELS
- For year 2020 Government will relax on the restriction of using hotels for official government functions but subject to the availability of the ministries and agencies’ existing funds allocation.
MEASURE 14: EMPLOYMENT INSURANCE SYSTEM(EIS)
- Entitlement for assistance for job loss
- Waiving the minimum requirement of 3 months contribution
- Increasing the training fee ceiling from RM4,000 to RM6,000
- Provide training allowance RM30 per day
MEASURE 15: SKILLS TRAINING FUND
- Provide HRDF RM100 million matching grant which prioritises training for affected sectors by COVID-19 such as hotels, tourism, retails, electrical and electronic and automotive manufacturing.
- Provide further RM50 million subsidy for short course particularly in digital skills e.g. coding, digital marketing and data science.
- Provide RM20 million allocation to fund short courses conducted by the 13 state development centres (SSDC).
MEASURE 16: ONE-OFF CASH INCENTIVE OF RM600 FOR TAXI & TOUR BUS DRIVER, TOUR GUIDES
- One-off cash incentive RM600 in April 2020 to taxi drivers, tour bus drivers, tour guides and trishaw driver who are active and registered since 31 December 2019.
MEASURE 17: SPECIAL ALLOWANCE OF CIVIL SERVANTS DIRECTLY INVOLVED COVID-19
- Special allowance RM400 per month for doctors and other medical personnel and RM200 for frontline personnel such as immigration officers at the entry points.
- From 1 February 2020 until the outbreak is contained.
MEASURE 18: MINISTRY OF HEALTH(MOH)-COVID-19 HOSPITAL EQUIPMENT OUTBREAK
- Allocation of RM150 million to MOH for purchase equipment such as thermal scanners and other equipment and consumables identified by MOH.
MEASURE 19: EMPLOYEES PROVIDENT FUND(EPF) EMPLOYEE CONTRIBUTION
- Employee contribution will be reduced by 4% (from 11% to 7%)
Period: From 1 April 2020 to 31 December 2020
MEASURE 20: BANTUAN SARAH HIDUP(BSH) ENHANCEMENTS
- Bring forward BSH payment RM200 scheduled by May 2020 to be paid in March 2020
- Additional one-off cash payment of RM100 in May 2020
- A further RM50 will be subsequently channelled through e-tunai
MEASURE 21: AGROFOOD
- Bank Negara expanded fund utilisation specifically for SMEs involved in food production at size of RM1 billion. The fund offered at maximum 8 years tenure at 3.75% rate and RM5 million per SME.
- Allocation of RM40 million in helping SMEs
- Establish wider network of storage facilities for food by FAMA
- Grant to small enterprise to sell and market products on e-commerce platforms
- Scaling up eUsahawan program
MEASURE 22: SMALL SCALE PROJECTS NATIONWIDE
- Allocating RM350 million through state government to undertake public infrastructure maintenance.
- Additional RM250 million to Ministry of Works.
- Special allocation to Ministry of Education amounting RM100 million on enhancing cleanliness of schools.
MEASURE 23: TO FACILITATE PROCUREMENT PROCESS
- Government is revising the limit of procurement to speed up the procurement process.
MEASURE 24: ACCELERATING PUBLIC INVESTMENT
- To bolster of confidence, the government is committed to sustaining public investments and in particular, expedite in 2020, the tenders and implementation of development expenditure projects.
MEASURE 25 : SME AUTOMATION & DIGITALISATION FACILITY(ADF)
- Bank Negara to establish RM300 million SME Automation and Digitalisation Facility to SMEs to upgrade, modernise and rejuvenate their productive assets and ICT equipment.
- Tenure offered 10 years at interest rate 3.75% and maximum RM3 million per SME.
MEASURE 26: SECURITIES COMMISSION CO-INVESTMENT FUND OF RM500 MILLION
- Government to co-invest through Government Linked Investment Companies up to RM500 million alongside with private sectors in early state and growth state.
MEASURE 27: THE SC & BURSA MALAYSIA WILL WAIVE THEIR LISTING FEES FOR COMPANIES ON LEAP OR ACE
- Fee waiving for 12 months.
- For Main Market it is applicable on companies with capitalisation of less than RM500 million.
MEASURE 28: ACCELERATED CAPITAL ALLOWANCE(ACA) FOR MACHINERY & INCLUDING ICT EQUIPMENT
- Purchase of qualifying machinery and equipment including ICT equipment
- Given ACA within 2 years
Period of purchase: 1 March 2020 to 31 December 2020
MEASURE 29: SPECIAL TAX DEDUCTION ON COSTS OF RENOVATION & REFURBISHMENT
- Limit to RM300,000 – Renovation and refurbishment for business premises
Period From: 1 March 2020 to 31 December 2020
MEASURE 30: IMPORT DUTY & SALES TAX EXEMPTION ON EQUIPMENT & MACHINERY FOR PORT OPERATORS
- Port operators are given import duty and sales tax exemption on import or locally purchase of equipment and machinery used directly in port operation
Period From: 1 April 2020 to 31 March 2023
MEASURE 31: VALUE ADDED ACTIVITIES CARRIED OUT IN LICENSED MANUFACTURING WAREHOUSE(LMW) & FREE INDUSTRIAL ZONE(FIZ)
- The approval and facilitation process to be improved and simplified at RMDC level.
MEASURE 32: DOUBLE DEDUCTION FOR ESTABLISHMENT OF REGIONAL OFFICE BY INTERNATIONAL SHIPPING COMPANIES
- Double deduction on pre-commencement expenditure for setting up regional offices in Malaysia.
- Application to MIDA not later than 31 December 2021.
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