On 27 February 2020, the Government announced the 2020 Economic Stimulus Package themed “Bolstering Confidence, Stimulating Growth and Protecting Jobs”.
This package is a response to the recent outbreak of Covid-19 which was responsible for closure of cities, shut down of factories and restrictions on travel in China. Being Malaysia’s largest trading partner, major export market and source of millions of international tourists, China with its travails indirectly impacted Malaysia’s economic growth which had been bearish since mid-January 2020. The 2020 Economic Stimulus Package is targeted to aid the Rakyat and business community, whose livelihood had since been somewhat affected by the Covid-19 outbreak. It is hoped that the various fiscal and other measures as proposed in the Stimulus Package will help to cushion the negative effects wrought on the economic sectors most affected by Covid-19, namely tourism, airline, travel and tourism-dependent retailers.
The major changes in the policies are as follows:
1. Deferment of monthly tax instalments for a period of 6 months for businesses in the tourism industry
2. Revision of monthly tax instalments in the third month of basis period
3. Tax deductions of up to RM300,000 on renovation costs incurred on business premises
4. Contribution by employees to Employees Provident Fund is reduced to 7% from 11%
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