Malaysia: 2020 Economic Stimulus Package

The 2020 Economic Stimulus Package with the theme “Bolstering Confidence, Stimulating Growth & Protecting Jobs” was delivered on 27 February 2020 by our Prime Minister of Malaysia. 

The stimulus package valued at RM20 billion is anchored on three strategies as follows: 

Strategy I: Mitigating impact of COVID-19 

• To allow deferment of monthly income tax instalment payments for businesses in the tourism sector 

• Companies affected by the COVID-19 to be allowed to revise their profit estimates for 2020 with respect to monthly income tax instalment payments without penalty

• To provide 15% discount in monthly electricity bills to hotels, travel agencies, airlines, shopping malls, conventions and exhibition centres 

• To exempt Human Resource Department Fund (HRDF) levies for hotels and travel related companies 

• To exempt 6% service tax for hotels 

• Bank Negara Malaysia (BNM) will provide a Special Relief facility worth RM2 billion, particularly in the form of working capital for Small Medium Enterprises (SMEs) at an interest rate of 3.75% 

• Bank SimpananNasional (BSN) will allocate a RM200 million in microcredit facility offering an interest rate of 4% to affected business 

• All banks are required to provide financial relief in the form of payment moratorium comprising restructuring and rescheduling loans for affected businesses and individuals 

• The Government calls on industry players to play their part – for 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

• The Government will give a one-off payment of RM600 each to taxi drivers, tourist bus drivers, tourist guides and registered trishaw drivers 

• Government staff directly involved in the containment efforts will be eligible for a special monthly critical allowance of RM400 for medical doctors and other medical personnel, as well as RM200 for immigration and related front line staff 

• The government will provide double deduction on expenses incurred for approved tourism-related training 

• The government will provide up to RM100 million on a matching grant basis to HRDF to fund an additional 40,000 employees from the tourism and other affected sectors 

• The government will provide RM50 million to subsidise short courses in digital skills and highly skilled courses 

• Personal income tax relief of up to RM1,000 on expenditure related to domestic tourism 

• Malaysian will be eligible to digital vouchers for domestic tourism of up to RM100 per person for domestic flights, rails and hotel accommodations for all Malaysians 

• An allocation of RM500 million is provided for the vouchers and tourism promotion

Strategy II: Catalysing rakyat (people) centric economic growth 

• 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 

• Agrofood facility of RM1 billion will be provided by Bank Negara Malaysia at an interest cost of 3.75% to promote food production activities to meet domestic and export demand 

• RM10 million allocation to Federal Agricultural Marketing Authority (FAMA) to provide food storage facilities to help reduce food prices 

• Grants of RM1,000 to 10,000 local entrepreneurs to promote sale of their products on e-commerce platforms 

• Allocation of RM20 million to Malaysian Digital Economy Corporation (MDEC) for Perkhidmatan e-Dagang Setempat (PeDAS) programme to transform Pusat Internet Desa into e-commerce hubs 

• The Government will allocate an additional RM2 billion for the immediate implementation of small infrastructure repair and upgrading projects nationwide especially in rural areas 

Strategy III: Promoting quality investments 

• Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC) will open for bids quota of 1,400MW for solar power generation which is expected to involve RM5 billion private investments and generate 25,000 jobs 

• Malaysian Communications and Multimedia Commission (MCMC) will implement up to RM3 billion on works related to the National Fiberisation and Connectivity Plan (NFCP) 

• GLCs will invest RM13 billion in 2020, including accelerating projects such as LED street lights, transmission lines and rooftop solar installations 

• A Co-Investment fund of RM500 million to be coinvested and matched by private investors on a ratio of at least 1 to 3 which will make the total funds amount to RM2 billion for investment in early-stage and growth-stage Malaysian companies 

• Waiving the listing fees by Securities Commission and Bursa Malaysia 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 

• Bank Negara Malaysia will provide an SME Automation & Digitalization Facility of RM300 million at an interest cost of 3.75% 

• The Government will provide accelerated capital allowances over a two-year period on expenses incurred on machinery and equipment including ICT 

• The government will provide a tax deduction of up to RM300,000 on renovation and refurbishment cost 

• Importduty andsalestax exemptiononimportation or local purchase of machinery and equipment used in port operations for 3 years commencing 1 April 2020 

We hope, with the cooperation, persistent effort and solid identity, our beloved nation will become more prosperous and resilient.

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