Malaysia implemented lockdown under the Movement Control Order (MCO) starting from 18 March 2020 aimed to slow the spread of COVID-19: the country’s borders were shut, travel restrictions were imposed, all government, business and private premises were required to close, except for those in the essential services. The approach taken focuses on 6 phases: Resolve, Resilience, Restart, Recover, Revitalise and Reform. Tranches of proactive and reactive economic measures from the 1st to the 4th phases total valued at RM295 billion were taken by Malaysia to stimulate the economy and assist the people and businesses through this challenging time. A summary of the key economic measures and support introduced to-date are as follows:
Tax measures
- Tax deduction on selected costs, expenditure and industry
- Deduction of up to RM300,000 for renovation and refurbishment costs incurred from 1 March 2020 to 31 December 2021
- Deduction on contributions to charity or project dealing with COVID-19 pandemic
- Increase in Accelerated Capital Allowance (ACA) rate up to 40% for machinery and equipment, including information communication technology (ICT) until 31 December 2021
- Additional deduction on minimum 30% rental discount for 6 months as given by landlords to eligible SME tenant
- Deduction for employers which implement Flexible Work Arrangements (FWA) or undertake enhancement of their existing FWA with effect from 1 July 2020
- Deduction or allowance for COVID-19 prevention expenditure provided to employees, including COVID-19 testing, purchase of personal protective equipment (PPE) and thermal scanners
- Tax rebate of up to RM20,000 per year for 3 years of assessment for new established SME between 1 July 2020 and 31 December 2021
- Tax exemption on selected costs, expenditure and industry
- Exemption of stamp duty on restructuring and rescheduling of loans
- Exemption of stamp duty for SMEs on any instruments executed for Mergers and Acquisitions (M&A) for the period between 1 July 2020 and 30 June 2021
- Exemption of service tax given to accommodation premises operators such as hotels from 1 March 2020 to 30 June 2021
- Exemption of sales tax and import duty on face mask imported or purchased
- Exemption of sales tax and import duty on medical, lab and personal protective equipment imported or purchased for donation
- Exemption of sales tax, excise duty and import duty on ethyl alcohol given to manufacturers of hand sanitisers
- Exemption of sales tax and import duty for 3 years on equipment and machinery purchased for port operations
- Full exemption of sales tax on locally assembled cars and 50% exemption of sales tax on imported cars
- Exemption of Tourism tax from 1 July 2020 to 30 June 2021
- Exemption of export duty for crude palm oil, crude palm kernel oil and refined bleached deodorised palm kernel oil from 1 July 2020 to 31 December 2020
- Reduce threshold for selected tax incentives or schemes
- Application for exemption from complying with conditions due to COVID-19 pandemic and MCO available under the Principal Hub incentive
- Deferment of tax instalment payment
- Automatic deferment of monthly tax instalment payment for 9 months given to companies in tourism related business
- Automatic deferment of monthly tax instalment payment for 3 months given to all SMEs
- Special early revision in the 3rd month on tax payable estimation for affected businesses
- Deferment of tax payments
- Automatic extension of time to 30 June 2020 for payment of sales and service tax for the period from January 2020 to April 2020.
- Remission of penalty
- 50% remission of penalty for late payment of sales tax and service tax due and payable from 1 July 2020 to 30 September 2020
Business support
- Deferment of loan repayments
- Automatic suspension of SMEs repayment obligation with no penalties and late payment charges for 6 months
- Reduction on electricity bills given to companies for non-residential properties
- Discount range from 2% to 15% for 6 months
- Special cash grant to micro enterprises
- One off cash subsidy of RM3,000 to eligible micro enterprises
- Reduction on rental
- waiver of rental for all premises owned by the federal government
- discounts on rental for non-residential premises owned by government-linked companies to SME retailers
- Financing facilities at reduced rates for micro businesses and SMEs to support funding in specific purpose
- Micro Credit Scheme – maximum RM75,000 per micro enterprise or self-employed individual at financing rate of 0%
- Special Relief Facility COVID-19 – maximum RM1 million per SME at financing rate up to 3.50% p.a.
- All Economic Sector Facility – maximum RM5 million per SME at financing rate up to 7% p.a.
- Automation and Digitalisation Facility – maximum RM3 million per SME at financing rate up to 4% p.a.
- Agrofood Facility – maximum RM5 million per SME at financing rate up to 3.75% p.a.
- Micro Enterprises Facility – maximum RM50,000 per enterprise
- Waiver of listing fees
- Fee waiver of 12 months for companies seeking to list
- Expansion of approved activities to provide more value-added services for licensed manufacturing warehouse (LMW) and operating in free industrial zone (FIZ)
- Other allocated funds in the nation’s recovery plan
- RM100 million of matching grant for SME Digitalisation
- RM100 million of grant for Smart Automation
- Up to RM50 million of matching grant for eligible gig economy platforms
- RM25 million provision for Global Online Workforce (GLOW) program
- Up to RM5,000 one-off grant for each eligible childcare centre
- RM500 million of loan for SME Technology Transformation Fund
- RM2 billion of funding facility for eligible SME
- RM400 million of funding facility for micro enterprises with RM50 million earmarked for women entrepreneurs
- RM1 billion of funding facility for PENJANA Tourism Financing (PTF)
- RM400 million of funding facility for agriculture and food sector
- RM225 million of funding facility and support for the arts, culture, entertainment, events and exhibitions sector
- RM1.6 billion of funding facility for contractors and vendors of small government projects
- RM200 million funding facility for Bumiputera
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