PRIME Minister Muhyiddin Yassin has announced an additional RM10 billion as part of the Prihatin economic stimulus package to aid small and medium enterprises (SME) and micro organisations to mitigate economic challenges due to Covid-19.  

In announcing the initiative today, Muhyiddin said the additional funds will alleviate the financial burden of SMEs and ensure that two-thirds of the country’s employees are still employed.  

“I realised that SMEs are core of the country’s economy. This sector contributes to about two-thirds of the jobs in this country and almost 40% to the country’s economy,” he said in a special address. 

“Hence, it is important for us to ensure that SMEs can be resilient and sustain themselves while weathering the economic challenges we are facing at this juncture,” he added. 

This will be on top of the RM250 billion stimulus package announced on March 27.

The Perikatan Nasional government had allocated RM230 billion in addition to the RM20 billion package announced by the former Pakatan Harapan administration. 

Muhyiddin said he had received feedback from SME associations, business chambers and micro organisations, seeking a review of the measures announced in the first package.  

This includes the SME Association of Malaysia, Malay Chambers of Commerce, ACCCIM, Malay Economic Action Council, and Usahanita, among others. 

He said these groups had indicated their businesses have been hit and they are in need of additional support. 

Issues faced include cashflow problems during the MCO, along with red tape issues becoming an obstacle for these organisations to have access to the government’s initiatives under the Prihatin package. 

The initiatives announced include an additional RM7.9 billion allocation for the wage subsidy scheme, bringing the total funds to RM13.8 billion. 

The following is the assistance companies with local workers with a salary below RM4,000, according to the number of workers:

• For companies with more than 200 workers, the wage subsidy of RM600 per worker will be maintained. However the maximum number of workers eligible for the scheme will be increased from 100 to 200. 
• For companies with 76 to 200 workers, they will receive a wage subsidy of RM800 per worker.
• For companies with 75 workers and below, they will be entitled to a wage subsidy of RM1,200 per worker. 

He said the aid will be for three months and will only apply to employers who have registered with the Companies Commission of Malaysia (CCM), local authorities and Socso before January 1, 2020. 

The initiative is expected to benefit 4.8 million workers. 

Muhyiddin said employers who receive the assistance, will have to keep their workers for at least six months – three months while receiving the subsidy and three months after. 

He said a RM2.1 billion Prihatin Special Grant for all eligible micro SMEs has also been set up.

The following are other measures put in place to help SMEs:

• A RM3,000 special grant for micro companies, which will benefit 700,000 micro SMEs. Companies will have to be registered with the Inland Revenue Board and the government will obtain the list of eligible companies from local authorities and SMEs. 
• The interest rate for the RM500 million Micro Credit Scheme will be reduced from 2% to 0%. The loan scheme for micro SMEs will be extended to Tekun Nasional, with a maximum of RM10,000 per company at 0% interest. A total of RM200 million has been allocated for this. 
• Government-link companies such as Mara, Petronas, PNB, PLUS dan UDA will waive rentals for SMEs in their premises. 
• Tax deduction for owners of private premises who reduce or waive rental for SMEs renting at their premises. The reduction has to be at least 30% of the rental. 
• A 25% reduction in foreign workers levy for companies whose worker permits expire between April 1 and December 31. This does not apply to house helps. 
• Extension of deadline for submission of authorised document to CCM by 30 days after the movement-control order. 
• Three-month extension to deadline for submission of company’s financial statements to CCM. This is for companies whose financial year end between September 30 and December 31, 2019.  No penalty will be imposed. 
• The Laksana unit, under the Finance Ministry, will keep tabs on the implementation of the measures. 

IMSME.COM.MY will be managed by the Credit Guarantee Corporation with the support of Bank Negara Malaysia, who will facilitate applications by SMEs for the above measures. – April 6, 2020.