Key Highlights related to PENJANA/ National Economic Recovery Plan

The Government unveils PENJANA (Pelan Jana Semula Ekonomi Negara) or the National Economic Recovery Plan. PENJANA will focus on 3 key thrusts – Empower People, Propel Businesses and Stimulate the Economy.

Key highlights for PENJANA:

For business:

  • Wages Subsidy Programme extended for another 3 months with subsidy of RM600 per employee for all eligible employers.
  • Incentive of hiring youth and unemployed workers:
    • Youth
      • RM600 per month for apprenticeships for school leavers and graduates for up to 6 months.
    • Unemployed Workers
      • Below 40 years old: RM800 per month for employment of unemployed for up to 6 months.
      • 40 years old and above: RM1,000 per month for employment of unemployed for up to 6 months.
  • A matching grant of up to RM50 million for gig economy platforms who contribute for their gig workers towards PERKESO’s employment injury scheme of up to RM 162 and EPF’s i- Saraan contribution of up to RM250 yearly.
  • Tax deduction for employers which implement Flexible Work Arrangements (FWAs) or undertake enhancement of their existing FWAs (effective 1st July 2020).
  • Grant for childcare centre that registered with the relevant authority: One-off grant of up to RM5,000 per child care centres to comply with new healthcare SOPs.
  • Another RM700 million of grants and loans to eligible enterprise for adoption or subscription of digitalisation services under the following programmes:
    • SME Digitalisation Matching Grant totalling RM100 million, in partnership with telecommunication companies.
    • SME Technology Transformation Fund totalling RM500 million loan (application opens from July 2020).
    • Smart Automation Grant totalling RM100 million, capped at up to RM1 million per company.
  • Additional RM2 billion of funding to assist SMEs adversely impacted by COVID-19 sustain business operations at a concession rate of 3.5% (maximum loan size of RM500,000 per SME). Details of this fund to be announced in July 2020.
  • RM1 billion PENJANA Tourism Financing (PTF) will be made available to finance transformation initiatives by SMEs for tourism industry. Details of this fund will be announced in July 2020.
  • RM400 million PENJANA Microfinancing to be allocated to support for micro enterprises via:
    • New funding programme for SMEs and micro enterprises at a subsidised interest rate of 3.5%.
    • Aggregated approved financing will be capped at RM50,000 per enterprise.
    • RM50 million is earmarked for women entrepreneurs.
  • Perbadanan Usahawan National Berhad (PUNB) will provide another RM200 million dedicated financial assistance for Bumiputera owned shariah compliant business in the form of:
    • Working capital
    • Operational expenditure
    • System automation
    • Equipment and expenditure to implement social distancing practices
    • Financing of RM100,000 – RM1 million for up to 5 years at 3.5% p.a. profit rates. Moratorium of up to 6 months from disbursement.
  • MARA will allocate:
    • RM300 million working capital loans to assist affected Bumiputera Entrepreneurs.
    • Maximum loan amount of RM1 million with 5% p.a interest rate.
  • Ease financial stress of business through:
    • 50% remission of penalty for late payment of sales tax & service tax due and payable from 1st July 2020 to 30th September 2020.
    • Extension of special tax deduction for renovation and refurbishment of business premises to 31st December 2021.
    • Extension of Accelerated Capital Allowance on eligible capital expenses including ICT equipment to 31st December 2021.
    • Extension of special deduction equivalent to 30% reduction on rental for SMEs to 30th September 2020.
  • Provide a matching grant through Malaysian Global Innovation & Creativity Centre (MaGIC) totaling RM10 million to social enterprises who are able to crowdsource contributions and donations to undertake social projects that will address the challenges faced by targeted communities through innovative ways
  • Income tax rebate up to RM20,000 per year for 3 years of assessment for newly established SME between 1st July 2020 to 31st December 2021
  • Stamp duty exemption for SMEs on any instruments executed for Mergers and Acquisitions (M&As), for period between 1st July 2020 to 30th June 2021.
  • Extension of period for deferment of tax instalment payment for tourism industry to 31st December 2020.

For personal:

  • Individual income tax exemption of up to RM5,000 to employees who receive a handphone, notebook & tablet from their employer for work from home (effective 1st July 2020).
  • Special individual income tax relief of up to RM2,500 on the purchase of handphone, notebook & tablet (effective 1st June 2020).
  • Subsidy of child care expenses by eVouchers of RM800 per household for mobile childcare services.
  • Increase of income tax relief for parents on childcare services expenses, from RM2,000 to RM3,000 for YA 2020 and 2021.
  • Encourage contact-free payment through the provision of:
    • RM 50 worth of e-wallet credits
    • Additional RM50 in value through vouchers, cashback and discounts by e-wallets
    • Only for offline/physical purchases.

(This is applicable to all Malaysians aged 18 and above, and earning less than RM100,000 annually)

  • The government reintroduces the Home Ownership Campaign (HOC), which offers stamp duty exemption for name transfer letters and financing agreements for properties.
  • RPGT exemption for disposal of residential homes from 1st June 2020 to 31st December 2021 (This exemption is limited to the disposal of three units of residential homes per individual)
  • The current 70% margin of financing limit applicable for the third housing loan onwards for property valued at RM600,000 and above, will be uplifted during the period of the HOC.
  • Tax exemption for purchase of passenger cars: Full sales tax exemption on locally assembled cars & 50% sales tax exemption on imported cars.
  • Tax incentives for the tourism sector:
    • Tourism tax exemption from 1st July 2020 to 30th June 2021
    • Extension of service tax exemption for hotels to 30th June 2021
    • Extension of period for income tax relief of RM1,000 for tourism expenses to 31st December 2021

A lot of details of the PERJANA highlights are pending to be unveiled by relevant authorities.

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Read more:

RM35 Bilion Pelan Jana Semula Ekonomi Negara/ PENJANA Versi Bahasa Melayu

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