THE government is urged to consider allowing the small and medium-sized enterprises (SMEs) to defer income tax instalment payments to December instead of for just three months till June.

In a joint statement, the Malaysian Institute of Certified Public Accountants and Malaysian Rating Corporation Bhd (MARC) said with the movement control order in force, many SMEs are facing bankruptcy as their cashflow and revenue dry up and overhead expenses accumulate.

 “We think the government could consider extending the deferment until December 2020. This is because we expect the impact of supply chain disruptions to be felt for quite some time after the outbreak ends,” they said in a statement entitled, Mitigating the Impact of Covid-19: Learning Points.

Under the Prihatin Rakyat Economic Stimulus Package unveiled on March 27, SMEs may delay income tax instalment payments for three months from April 1. This is granted in addition to the tax instalment payment deferment of six months, also from that date, for businesses in the tourism sector.

They said it is crucial for financial institutions to step forward at this critical moment in the country’s economic history.

“It is important that they continue to inject fresh funds into the economy and support economic activities by lending to viable businesses.

“Otherwise, we could end up with thousands of business failures which will have dire implications for the financial system, economy and labour market. The surge in business failures could also trigger social problems on a large scale.” – Bernama, April 12, 2020.