Following the PRIHATIN economic stimulus package announced 27 March 2020, Prime Minister Muhyiddin Yassin has declared yet another stimulus package on 6 April 2020 – this time targeted specifically at SMEs.
While the PRIHATIN package received broad support, it was criticised by SMEs for not addressing the root cause of their issues, namely impacted cash flow, severe revenue drops, and high overhead expenses.
With an additional RM10 billion directed towards SMEs, the Government hopes to alleviate this. The new packages largely mirror the SME wish list directed towards the Government in the wake of the PRIHATIN stimulus package.
SMEs may apply for these assistance packages through the imsme.com.my portal that is run by Credit Guarantee Corporation.
Among the measures announced are:
- An increase in the wage subsidy from RM5.9 billion to RM13.8 billion. Employers are able to claim on behalf of employees earning less than RM4000 per month.
- For companies with more than 200 employees, the wage subsidy is still RM600 per month per employee, but employers may claim this subsidy for 200 employees, instead of just 100.
- For companies with 76 to 200 employees, the wage subsidy is increased to RM800 per employee.
- For companies with 75 employees and below, the wage subsidy is increased to RM1200 per employee.
- Employers who choose to apply for this subsidy must retain their employees for at least six months after receiving the subsidy.
- The levy on foreign workers will be reduced by 25 percent (not including domestic workers).
- A special PRIHATIN grant worth RM2.1 billion is made available. RM3,000 will be disbursed to every eligible micro-SME (less than five staff, or less than RM300,000 in revenue).
- The interest rate on the RM500 million micro-credit scheme announced in the earlier PRIHATIN stimulus package will now be zero-rated up to RM10,000.
- Rent on premises in buildings owned by government-linked corporations (e.g. Petronas, MARA, PNB etc) will be discounted or waived. Private landlords that give at least a 30 percent discount on rent will get a tax deduction.
To ensure that the package is distributed quickly and efficiently, the Government has established the LAKSANA unit, under the aegis of the Ministry of Finance. The Government is also considering extending more initiatives to startups, recognising them as key enablers of the Fourth Industrial Revolution and the digitisation wave.