Tax planning

Malaysia Second Economic Stimulus Package 2020

28/03/2020
Tax planning
Will the RM250 billion Second Economic Stimulus Package 2020 benefit you?

On 27 March 2020, the Government announced a Second Economic Stimulus Package 2020 (ESP2) themed Prihatin Rakyat.

ESP2, valued at RM250 billion, includes:

  • RM128 billion for the protection of Rakyat welfare;
  • RM100 billion to support Small and Medium Enterprises;
  • RM2 billion to strengthen the country’s economy; and
  • RM20 billion to pursue measures announced under ESP1.

It is not surprising that the ESP2 came exactly one month after the First Economic Stimulus Package 2020 (ESP1), valued at RM20 billion, was announced on 27 February 2020.

 

Since the ESP1, Malaysia recorded over 2,000 positive cases and 24 deaths due to COVID-19 and is presently under a movement control order (MCO) since 18 March 2020. Also, COVID-19 outbreak is reported in almost every country around the world with the United States of America topping the list, surpassing China!

 

The negative effects of COVID-19 outbreak and MCO are greatly felt by the Rakyat and business community. Hence, it is hoped that the proposed measures under ESP2 will be able to spur the economy going forward.

Malaysia Second Economic Stimulus Package 2020 Table

Source link:

Prime Minister speech 
- Source: https://www.pmo.gov.my/wp-content/uploads/2020/03/Speech-Final.pdf

Employers and Businesses
  • The All Economic Sectors Facilities Fund will be increased from RM5.8 billion to RM6.8 billion.
  • The Micro Credit Scheme will be increased from RM500 million to RM700 million with an interest rate of 2%.
  • Deferment of loan repayment by SME will be extended to include loans taken from TEKUN, MARA and co-operatives and government agencies from 1 April 2020.
  • Introduction of RM50 billion guarantee scheme to guarantee up to 80% of the financing amount for the purpose of financing working capital.
  • Introduction of Social Financing Program to assist B40 entrepreneurs and individuals who lost their source of income.
  • Special Relief Facility fund will be increased from RM2 billion to RM5 billion whilst interest rate will be reduced from 3.75% to 3.5%.
  • Syarikat Jaminan Pembiayaan Perniagaan will provide RM5 billion guarantee facility while increasing the guarantee rate from 70% to 80% for SMEs with difficulty in obtaining financing.
  • SME with less than 4 years business record can apply for BizMula-I and BizWanita-I Syarikat Jaminan Kredit Malaysia Bhd with financing scheme of up to RM300,000.
People
  • One-off cash aid of RM500 will be given to Government pensioners.
  • One-off cash aid of RM500 will be given to e-hailing drivers.
  • Bantuan Prihatin Nasional of between RM500 and RM1,600 will be provided to eligible households and singles.
  • Balance cash payment under the Bantuan Sara Hidup (BSH) program will be paid in July 2020.
  • One-off cash incentive of RM200 will be given to students of higher education institutions.
  • One-off cash aid of RM500 will be given to civil servants below grade 56, including contract staff.
  • Special allowances to frontline medical industry personnel will be raised to RM600 a month starting from 1 April 2020 until the end of the Covid-19 pandemic.
  • mySalam wage replacement incentive of RM50 per day for a maximum period of 14 days will be extended to patients-under-investigation (PUI) in B40 category.
  • Free internet for all telecommunication users from 1 April 2020 until the end of the MCO period.
  • Deferment of monthly insurance premium and takaful contribution for a period of 3 months.
  • 6 months rent-free period for tenants occupying premises owned by Federal Government such as school canteen, kindergarten, cafeteria and others.
  • Tiered electricity discounts of between 15% and 50% for electricity usage up to 600kWh a month for 6 months beginning from the April 2020 bill.
  • 6 months rent-free period for tenants under Projek Perumahan Rakyat dan Perumahan Awam (PPR).
  • Deferment of monthly payment for a period of 6 months from April 2020 to September 2020 for PPR owners under Rent-to-Own (RTO) scheme.
  • Civil defence personnel will receive RM200 per month for their efforts in enforcing the Movement Control Order (MCO) starting from 1 April 2020 until the end of the pandemic.
  • Deferment of repayment of Perbadanan Tabung Pembangunan Kemahiran (PTPK) skills training loan by borrowers for a period of 6 months from 1 April 2020 to 30 September 2020.
  • RM1 billion will be allocated for Food Guarantee Fund.
  • All Ministries to review their budgets for saving purposes.
  • Up to RM200,000 assistance will be given to the Growers Associations and Fishing Associations.
  • 2 months’ salary reduction by Prime Minister, Minister and Deputy Minister as contribution to Tabung COVID 19.
  • RM100 million will be provided for preparing food storage and distribution infrastructure.
  • Direct fiscal contribution of RM25 billion to reduce the burden of individuals and businesses.
  • Assistance in the form of food, medical care and shelter totalling RM25 million will be allocated to the needy.
  • An allocation of RM10 million will be provided to pay contractors providing services such as cleaning and preparing food in government agencies.

To read more, click here for details.

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