On 27 February, the interim Prime Minister of Malaysia, Tun Dr Mahathir Mohamad unveiled the RM20 billion stimulus package to balance the consequence from the outbreak of Covid-19 that has a significant impact on the global economy as well as Malaysia.
The 2020 Economic Stimulus Package was introduced to ensure economic risks associated with the outbreak is addressed effectively. Below are the highlights of the package:
- Bank Negara Malaysia (BNM) will provide a Special Relief facility worth RM2 billion, particularly in the form of working capital for SMEs at rate of 3.75%
- Bank Simpanan Nasional (BSN) will allocate RM200 million in microcredit facility offering an interest rate of 4% to affected businesses
- All banks are required to provide financial relief in the form of postponement of payments or restructuring and rescheduling of loans for affected businesses and individuals
- To exempt the 6% service tax for hotels; whilst this exemption will be made effective from March to August 2020
- To allow deferment of monthly income tax instalment for tourism sector
- A temporary of 15% discount in monthly electricity bills to hotels, travel agencies, airlines, shopping malls, conventions and exhibitions centres
- Hotels to offer discounts and shopping malls to reduce rentals to their tenants
- Malaysia Airport Holdings Berhad (MAHB) will provide rebates on rental for premises at the airport as well as landing and parking charges
- One-off payment of RM600 each to taxi drivers, tourist bus drivers, tourist guides and registered trishaw drivers
- Personal income tax relief of up to RM1,000 on expenditure related to domestic tourism
- The minimum Employees Provident Fund (EPF) contribution by employees will be reduced by 4% from 11% to 7%, with effect from 1 April 2020 to 31 December 2020. This will potentially unlock up to RM10 billion worth of private consumption. Malaysian workers have the option to opt out from the scheme and maintain their contribution rate
- A payment of RM200 to all Bantuan Sara Hidup (BSH) recipients scheduled for May 2020 will be brought forward to March 2020. An RM100 will be paid into the bank accounts of all BSH recipients in May 2020. Subsequently, an additional RM50 will be channelled in the form of e-tunai
- Grants of RM1,000 to 10,000 local entrepreneurs to promote sale of their products on e-commerce platforms
- Securities Commission Malaysia and Bursa Malaysia will waive listing fees for one year, for companies seeking listing on Leading Entrepreneur Accelerator Platform (LEAP) or Access, Certainty, Efficiency (ACE) markets, as well as companies with market capitalisation of less than RM500 million seeking listing on the Main Market
- Import duty and sales tax exemption on importation or local purchase of machinery and equipment used in port operations for three years commencing 1 April 2020
- Malaysia’s GDP growth in 2020 is estimated to be in the range of 3.2% to 4.2%
For detailed information of the Economic Stimulus Package 2020, please visit: https://www.treasury.gov.my/index.php/en/budget/pre2020.html
