On April 6 at 4PM, Prime Minister Muhyiddin Yassin announced additions to the original initiatives for SMEs in the PRIHATIN Economic Stimulus Package that was shared on March 27, 2020.
These additions are targeted towards SMEs and micro SMEs, following the immense feedback that the government received after the March 27 announcement.
The additional initiatives will cost a total of RM10 billion, bringing the total cost of the PRIHATIN Economic Stimulus Package to RM260 billion, and the total cost of the SME related initiatives to RM14.5 billion.
1. More Wage Subsidies
First, the provision for the wage subsidy program that was announced on March 27 will be increased from RM5.9 billion to RM13.8 billion, which means an addition of RM7.9 billion.
Under this additional initiative, every company that employs local workers who are earning RM4,000 and below will receive the following subsidy assistance:
- For companies with more than 200 employees, a subsidy of RM600 per worker is maintained. However, the maximum number of workers is eligible to receive subsidies will be increased from 100 to 200 employee.
- For companies with 76 employees up to 200 employees, a subsidy of RM800 per worker will be given.
- For companies with 75 employees or less, a subsidy of up to RM1,200 per worker will be given.
This assistance is for 3 months and is dedicated to employers who have registered with SSM or the local authorities before January 1, 2020 and have registered with SOCSO (PERKESO).
About 4.8 million workers are expected to benefit from this initiative.
Employers who choose to receive this assistance are required to retain their employees for at least 6 months, which is for a period of 3 months upon receiving a wage subsidy, and 3 months later.
2. Introducing A Special Grant
A PRIHATIN special grant amounting to RM2.1 billion for all qualified micro SMEs will also be introduced.
The government will provide a special grant of as much as RM3,000 for each microcompany, which will benefit nearly 700,000 micro SMEs nationwide.
These micro-SMEs must register with the Inland Revenue Board (LHDN) to receive this assistance. The government will obtain a list of eligible micro SMEs from the local authorities and SSM.
3. A Moratorium For Instalment Payments
In addition, the government has also called on lending organisations listed below Akta Pemberi Pinjam Wang 1951 who provide credit facilities to impose a moratorium on SME instalment payments for 6 months beginning April 2020, as provided by the bank.
4. Abolishing Loan Scheme Interest Rates
Abolishing the 2% interest rate to 0% for the Micro Credit Scheme amounting to RM500 million under Bank Simpanan Nasional (BSN).
The easy loan scheme for micro SMEs will also be extended to TEKUN Nasional with a maximum loan limit of RM10,000 per company at a 0% interest rate.
For this purpose, a sum of RM200 million will be provided. Applicants can only choose one of these schemes to enable more businesses to enjoy this convenience.
5. Providing Rental Relief
The government also announced the exclusion of rental payments or providing rental discounts for SMEs in the premises owned by government linked companies.
Muhyiddin thanked federal government companies such as MARA, PETRONAS, PNB, PLUS and UDA and several other companies owned by the state government who have agreed to give a discount or not impose rent on their premises, specifically for SME tenants.
On the principle of shared burdens, Muhyiddin urged the owners of private premises to provide the same convenience by reducing rental rates in their premises at least during the MCO period and 3 months after the MCO ends.
Owners of a building or business space who provide a reduction or release of rent to the tenants who are SMEs will be given additional tax deductions equal to the amount of rent reduction for April 2020 to June 2020.
This additional tax deduction is provided subject to conditions of the reduction of rent, which has to be at least 30% of the original rental rate for that period.
6. The Allowing Of Compromises Between Employers & Employees
Understanding of the difficulties some employers are currently facing with keeping their workers in a state of desperation at this time, the government has agreed to encourage consultation between employers and workers on terms of employment, including payroll deduction options and the grant of unpaid leave during the MCO period.
Employers and employees can refer to Jabatan Tenaga Kerja for employment advice on any issues for resolution. Any consultations should be subject to the law on employment in force in this country. Most importantly, the rights and welfare of both parties must always be defended.
7. 30-Day Moratorium To Submit Statutory Documents
As companies are facing difficulties in submitting statutory documents to meet the requirements of SSM during the MCO period, the government has agreed to grant a moratorium automatically for 30 days from the last date of the MCO on behalf of the company submitting statutory documents to SSM.
8. Extension Of The Financial Statements Filing Period
The filing period of a company’s financial statements is also extended for 3 months from the last date of the MCO.
This flexibility is given to companies with financial years ending September 30 to December 31, 2019. However, companies will need to apply for this flexibility from SSM, and no late delivery fee will be charged upon the request.
To ensure that all PRIHATIN initiatives (including the additional ones) can be implemented quickly and smoothly, an inter-agency economic stimulus implementation and coordinating unit (LAKSANA) was set up by the Ministry of Finance.
This unit will constantly monitor and report the progress of the implementation of all initiatives to the Minister of Finance and Muhyidding himself.
To support the delivery of the PRIHATIN initiative, the imSME portal operated by Credit Guarantee Corporation (CGC) with the support of Bank Negara Malaysia (BNM) is ready to accept SME loan applications.
The portal also provides myKNP, which is an advisory service about financing for SMEs.
- You can read more about what we’ve written on the Economic Stimulus Package here.
Featured Image Credit: Bernama