Economic Stimulus Package 2020

ECONOMIC STIMULUS PACKAGE 2020

What is 2020 Economic Stimulus Packages?

Former Prime Minister Tun Dr Mahathir Mohamad had announced the First Economic Stimulus Package 2020 on 27 February 2020, to ensure economic riskd associated with the COVID-19 outbreak is effectively addressed.

 

On 27 March 2020, Prime Minister YAB Tan Sri Muhyiddin Yassin announced a Second Economic Stimulus Package 2020 to further counter the effects of an extended Movement Control Order (MCO). This package valued at RM250 billion, covers a wide range of economic aspects. It provides much needed relief to those in the lower middle-income group.

 

On 6 April 2020, additional stimulus package announced by Prime Minister Tan Sri Muhyiddin Yassin. This package valued at RM10 billion, to ease the financial burden of SMEs.

National Related

1. Bantuan Prihatin Nasional (BPN)

One-off cash assistance of RM 10 billion

Categories Cash Assistance Release on
Household income less than RM 4,000 per month (B40) RM 1,600 RM 1,000 in April & RM 600 in May
Household income RM 4,001 to RM8,000 per month (M40) RM 1,000 RM 500 in April & RM 500 in May
Single Individual aged 21 and above, earning less than RM 2,000 per month RM 800 RM 500 in April & RM 300 in May
Single Individual aged 21 and above, earning RM 2,000 to RM 4,000 per month RM 500 RM 250 in April & RM 250 in May
Students at various levels of tertiary education RM 200 RM 200 in May

 

 

Method of payment
🔵 Individual/household income under B40 category

  1. With bank account: Cash assistance will be transferred to your registered bank account.
  2. Transaction failure: Must go Bank Simpanan Nasional (BSN) to claim BPN money by cash.
  3. Without bank account: Must go Bank Simpanan Nasional (BSN) to claim BPN money by cash.

 

🔵 Individual/household under M40 category

Cash assistance will be transferred to registered bank account stated in LHDN account/ head of household’s registered bank account

 

For those who do not have account registered under LHDN or not yet applied for BPN, you may register or apply via www.hasil.gov.my.

 

For those have registered account under LHDN, you may update your bank account via e-kemaskini (kttps://ez.hasil.gov.my/ci/ >e-kemaskini . Profil Diri) to ensure latest bank information of beneficiary is updated.

 

For those who just applied for BPN, you need wait to see either your application or “Permohonan Diterima” is accepted or rejected. If you are not getting any BPN money on 30 April or 31 May, you are rejected or not qualified for BPN.

 

You can check your status at the following portals:
http://www.hasil.gov.my
https://bsh.hasil.gov.my/
https://www.treasury.gov.my/

2. Withdrawal of Retirement Funds

a) Private Retirement Scheme (PRS): RM1,500 per member from Private Retirement Scheme

 

b) EPF Account

  • Malaysian Resident below 55 years old
  • Choose the monthly withdraw amount from RM 50 to RM 500, which is fixed for the whole period once approved.
  • Saving to be deposited in bank account starting May 2020
  • Effective for a maximum period of 12 months
  • Registration via:

i) Starting 1 April for email and post

ii) Staring 1 May for online (KWSP website is ready now)

3. Tax Deduction for Domestic Travel

Special personal income tax relief of RM1,000 is given to resident individuals for domestic travelling expenses incurred between 1 March to 31 August 2020.

Eligible expenses:

a) Accommodation fees on a tourist accommodation premises registered with the Ministry of Tourism, Arts and Culture Malaysia;

b) Entrance fees to tourist attractions

4. Special Allowances

a) Special Allowances effective from 1 April 2020:

i) Doctors, nurses and medical staff – RM600 per month

ii) Military, police, customs, civil defence and RELA – RM200 per month

*Allowance will be paid until the COVID-19 outbreak ends

 

b) One-off cash:

i) One-off RM500 for civil servants of grade 56 and below (in April)

ii) One-off RM500 for government pensioners (in April)

iii) One-off RM500 for 120,000 e-hailing drivers (paid on 1 April)

iv) One-off RM600 for taxi drivers (paid on 1 April)

 

For those taxi drivers who is not being included in the package listing, kindly contact hotline of Ministry of Transport 03-8891 7189 or via Whatsapp 019-290 7723 for more information.

 

For those drivers in tourist industry who is not being included in the package listing, kindly contact hotline of Tourism Malaysia 03-8891 7189 for more information.

5. Free Internet

Free internet for all telecommunication users from 1 April 2020 until the end of the MCO period.

6. TNB Electricity Discount

2% discount for household sectors electricity bills from 1 April 2020 until 30 September 2020 (total of 6 months).

7. Extension of Deadline

Form Type & Category of Payer Original Deadline New Deadline
Form BE
Resident Individuals
30 April 2020 30 June 2020
Form BT
Resident Individuals
(Knowledge / Expert Workers)
30 April 2020 30 June 2020
Form M
Non-resident Individuals
30 April 2020 30 June 2020
Form MT
Non-resident Individuals
(Knowledge / Expert Workers)
30 April 2020 30 June 2020

8. Others

a) Assistance to the vulnerable groups through NGO (non-cash)
b) PTPTN repayments deferred for 6 months.
c) Establish Food Security Fund to ensure sufficient food supply (RM1billion).
d) 6 months rental exemption for tenants under Projek Perumahan Rakyat (PPR) and Perumahan Awam.

Micro Enterprises

According to SME Corporation Malaysia, “Micro” is definded as a company with sales turnover of less than RM 300,000 OR employees of less than 5 people.

1. Special Prihatin Grant

A special grant of RM3,000 will be provided to eligible micro enterprise. The micro enterprise is required to register with the Inland Revenue Board (LHDNM) to qualify for this grant. The local authorities and SSM will provide the list of eligible micro enterprises to Government. Application will be available on 1 May 2020.

2. Micro Credit Scheme

Total of RM 500 million fund will be allocated for 0% Micro Credit Scheme, which is issued by Bank Simpanan Nasional (BSN). It is for the purpose of working capital and capital expenditure. The maximum loan amount is up to RM 75,000 and maximum loan tenure up to 5.5 years, with 0% interest rate.

 

The eligibility requirements are:
a) Owner is Malaysian citizen
b) Owner age from 21 to 65 years old
c) Applicable for sole proprietor, partnership or private limited.
d) Company have been registered with SSM for more than 6 months

 

Document required for the applications:
a) BSN application form (download link: https://www.mybsn.com.my/formdownload?formDownloadId=2265)
b) Applicant and spouse IC
c) SSM certificate
d) 3 months latest bank statements
e) Any other required documents

 

How do Apply?
Contact nearest BSN Business Financing Executives for further information: https://www.mybsn.com.my/formdownload?formDownloadId=2211

For more information, please visit the website at https://www.mybsn.com.my/content.xhtml?contentId=1633

3. Soft Loan Scheme

Total of RM200 million fund will be allocated for the Soft Loan Scheme, which is issued by TEKUN Nasional. The maximum loan amount is up to RM10,000 with 0% interest rate. It provides simple and quick financing facilities to Bumiputeras & Indian.

For more information, please visit website at https://www.tekun.gov.my/ms/inisiatif-tekun-covid19/

4. CP 500 Instalment

Sole proprietor and partnership don’t need to make payment for March & May 2020 CP 500 instalment.

5. Extension of Deadline

Form Type & Category of Payer Original Deadline New Deadline
Form E
Non-company / Non-Labuan Company Employers
31 March 2020 31 May 2020
Form P
Partnerships
30 June 2020 31 August 2020
Form B
Resident Individuals who carry on business
30 June 2020 31 August 2020
Form BT
Resident Individuals who carry on business
(Knowledge / Expert Workers)
30 June 2020 31 August 2020
Form M
Non-resident Individuals who carry on business
30 June 2020 31 August 2020
Form MT
Non-resident Individuals who carry on business
(Knowledge / Expert Workers)
30 June 2020 31 August 2020

Small And Medium Enterprises (SMEs)

According to SME Corporation Malaysia:
i. Manufacturing – Sales turnover from RM300,000 to RM50 million OR employees from 5 to 200 peoples
ii. Services and others Sectors – Sales turnover from RM300,000 to RM20 million OR employees from 5 to 75 peoples

 

According to LHDN:
i. Have a paid-up capital of less than or equal to RM2.5 million ordinary shares at the beginning of the basis period for a year of assessment; and
ii. Have a gross business income of RM50 million and below.

1. Wage Subsidy Programme (WSP)

The wage subsidy is a financial assistance paid to employers of every enterprise, for each worker earning RM4,000 and below and for a period of three months only.

• Eligibility conditions:
a) 50% or more decline in revenue/income since Jan 2020(Employees > 75 people)
b) Only for employees earning RM4,000 and below (Contributing SOCSO/EIS)
c) No pay-cut, retrenchment or unpaid leave (instructed by employer) for a period of 6 months
d) Registered with CCM or PBT and operated before 1 January 2020
e) Registered with or contributing to SOCSO and EIS before 1 April 2020
• 3 months subsidy (1 April 2020 to 31 December 2020)
• Application can be submitted through https://psu.perkeso.gov.my/ from 9 April 2020
• Closing date: 15 September 2020 (Subject to fund availability and government decision)
• Subsidy shall be credited to employers’ account within 7-14 days upon approval

 

Company Type Subsidy Amount Maximum Subsidy Number
Not more than 75 employees RM 1,200 per employee Maximum 75 employees
76-200 employees RM 800 per employee Maximum 200 employees
More than 200 employees RM 600 per employee Maximum 200 employees

 

Please check more information for Wage Subsidy Programme at https://www.liew.my/covid19-advice-to-boss/wage-subsidy-programme-wsp/

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2. Employment Retention Program (ERP)

The Employment Retention Program is an immediate financial assistance provided for employees who have been instructed to take no paid leave by their employers who are economically affected by Covid-19 pandemic. This financial assistance is RM600 per affected employee per month.

• Eligibility conditions:
a) Private sector employees who are contributing EIS
b) Limited to employees with monthly salary of RM4,000 and below
c) Implemented no-pay leave (30 days minimum) since 1 March 2020
• Assistance paid based on no-pay leave notice period between 1 to 6 months
• Applications can be made by employers using Form ERPC-19 since 20 March 2020
• Application can be made via online application (https://erp.perkeso.gov.my/)
• ERP shall be credited to employer’s bank account, employers are required to credited the payment directly to affected employees’ accounts within 7 days

3. Human Resource Development Fund (HRDF)

HRDF payment exempted for all sectors for 6 months from March 2020 to August 2020. HRDF registered employers can continue their training claim as long as their available levy balance more than 50% of their total claim amount.

4. Levy on Foreign Worker

Levy on foreign worker reduced by 25% with work permits that will expire in the period of 1 April 2020 to 31 December 2020 (not applicable to the domestic help sector).

5. Employees Provident Fund (EPF)

a) Employer Advisory Services (EAS) – EPF is introducing this programme on 15 April 2020. This service includes options for deferring payments, restructuring and rescheduling of employers’ contributions. The measure is expected to provide cashflow to employers.
b) EPF Contribution – EPF payment for contribution month April 2020 (wages month March 2020) extended from 15 April 2020 to 30 April 2020.
c) Contribution rate for employee – Reduced from 11% to 7% from 1 April 2020 to 31 December 2020.

You may refer to KWSP website at https://www.kwsp.gov.my/ for more information.

6. Income Tax

a) Income tax instalment
• SMEs don’t need to make payment for CP204 from April to June 2020.
• Tourism sector don’t need to make payment for 6 months CP204 from April to September 2020.
• Tax estimation allowed to revised in 3rd, 6th and 9th month.

b) Renovation and refurbishment expenditures incurred from 1 March 2020 to 31 December 2020 is allowable for tax deduction of maximum RM 300,000.

7. Sales and Service Tax

a) Service tax exempted for Hotel and Accommodation operators from 1 March 2020 to 31 August 2020
b) Submission & Payment of SST
• Jan & Feb 2020 – Extended from 31 March 2020 to 12 May 2020
• Feb & Mar 2020 – Extended from 30 April 2020 to 12 May 2020

8. Extension of Deadline

Form / Document Type & Categories Original Deadline New Deadline

Form E
Company / Labuan Company Employers

31 March 2020 31 May 2020

Form C
Companies (Year ended 31 July 2019 to 31 December 2019)

7 months from year ended date 9 months from year ended date
Form PT
Limited Liability Partnerships (Year ended 31 July 2019 to 31 December 2019)
7 months from year ended date 9 months from year ended date
Lodgement of Statutory Documents to CCM Submission deadline during MCO period 30 days after MCO

Filing of Audit Report to CCM

– Year ended 30 September 2019

– Year ended 31 October 2019

– Year ended 30 November 2019

– Year ended 31 December 2019

 

30 April 2020

30 May 2020

30 June 2020

30 July 2020

 

29 July 2020

28 August 2020

28 September 2020

28 October 2020

Form A – EPF Contribution

Contribution month April 2020 (Salary month March 2020)

– Submission

– Payment

 

 

15 April 2020

15 April 2020

 

 

15 April 2020

30 April 2020

Form 8A – SOCSO Contribution

Salary month March 2020 to September 2020

 

15th of next month

 

End of next month

EIS Contribution

Salary month March 2020 to September 2020

 

15th of next month

 

End of next month

CP39 – Monthly Tax Deduction

PCB for March 2020

– PCB for April 2020

 

15 April 2020

15 May 2020

 

31 May 2020

31 May 2020

9. Related To Loan

IMSME.COM.MY managed by Credit Guarantee Corporation (CGC) since 2018

a) 6 months Loan Moratorium:
• PTPTN Loan
• Skills Development Fund Corporation (PTPK)
• TEKUN Nasional
• Cooperatives
• Commercial banks

 

b) Additional Loan Facilities
I. Special Relief Facility (SRF) – https://imsme.com.my/portal/bizjamin-special-relief-facility/
• Total fund allocation is RM 5 billion
• Interest rate of 3.5%
• Loan amount from RM 20,000 to RM 1 million
• Maximum loan tenure is 5.5 years (including 6 months deferment)

 

II. All Economic Sector Facility
• Total fund allocation is RM 6.8 billion with additional RM 1 billion
• Available for capital expenditure and working capital
• Maximum Interest rate is up to 7% (depends on bank)
• Maximum loan amount is up to RM 5 million
• Maximum loan tenure is up to 5 years
• Eligibility conditions:
i. Register with CCM
ii. Shareholders’ funds not exceeding RM 5 million
iii. Less than 20% shares holder by PLC and GLC
iv. Minimum 51% shares hold by Malaysian

 

III. Danajamin Nasional Berhad – https://www.danajamin.com/
• First and only Financial Guarantee Insurer
• Raise capital via the bond/sukuk market
• RM 50 billion Guarantee Scheme to guarantee up to 80% working capital financing
• Minimum guaranteed loan: RM 20 million
• Application available from 1 May 2020 to 31 December 2020

10. Related To Rental

a) Government or government-linked companies’ premises
• Waive or provide discounts for rentals to SMEs in the retail sector by government or government-linked companies
• 6 months rental exemption for
i. Projek Perumahan Rakyat (PPR)
ii. Public Housing (Kuala Lumpur City Hall)
iii. Premises owned by the Federal Government (e.g. School canteens, nurseries, cafeterias, convenience stores and others)

b) Tax Deduction
• Special tax deduction for rental reduction for the months of April until June 2020
• Condition that rental reduction is at least 30% of the original rental rate
• Required documents:
i. Valid rental agreement
ii. Rental income statement
iii. Confirmation of tenant SME status
• Example of Special Tax Deduction:

 

11. TNB Electricity Discount

6 months discount on electricity bill for Tourism, Commercial, industrial, agricultural started from April 2020 until September 2020.

 

Monthly consumption

(KWH)

Monthly electricity expenses TNB Discount
0 – 200 ≤ RM43.60 50%
201 – 300 RM43.70 – RM77.00 25%
301 – 600 RM77.10 – RM231.80 15%
> 600 ≥ RM 231.90 2%

For further information, please refer to Economic Stimulus Package 2020 booklet.