THE government today introduced a RM20 billion stimulus package to mitigate the economic impact of the Covid-19 outbreak.

In announcing the package today, interim prime minister Dr Mahathir Mohamad said the stimulus package was anchored on three strategies, namely, mitigating impacts of Covid-19; spurring rakyat-centric economic growth and promoting quality investments.

He said the government will implement a three-pronged approach to mitigate the impact of the outbreak, that is, to ease the cash flow of affected businesses; to assist affected individuals; and, to stimulate demand for travel and tourism.

He said the government is proposing a six-month period beginning from April until September 2020 to:

–  allow deferment of monthly income tax installment payments for businesses in the tourism sector. In addition, companies affected by the Covid-19 outbreak will be allowed to revise their profit estimates for 2020 with respect to monthly income tax installment payments without penalty;

– provide 15% discount in monthly electricity bills to hotels, travel agencies, airlines, shopping malls, conventions and exhibitions centres;

– exempt Human Resource Development Fund (HRDF) levies for hotels and travel related companies; and,

– exempt the 6% service tax for hotels.

However, these exemptions will be made effective earlier, that is, from March to August 2020.

Dr Mahathir said the government will also provide financing facilities for affected companies.

This will be done by:

– Bank Negara providing 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%; and

– Bank Simpanan Nasional (BSN) allocating a RM200 million microcredit facility offering an interest rate of 4% to affected businesses.

In addition, the approval process for existing loan funds will be further streamlined, such as Bank Pembangunan’s tourism infrastructure fund of RM1.5 billion.

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

Dr Mahathir added that Bank Negara is tasked with ensuring that all financial institutions assist all companies in need, without exception. – February 27, 2020.