ANNOUNCEMENT 27 Mar 2020

Malaysia's Prime Minister has announced a second stimulus package to support individuals and businesses affected by the COVID-19 outbreak.

NUMBER OF INTERVENTIONS

4

  • 4 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

Official Speech - Prihatin Rakyat Economic Stimulus Package (PRIHATIN) Speech Text
https://www.pmo.gov.my/2020/03/speech-text-prihatin-esp/

Central Bank of Malaysia - Additional Measures to Further Support SMEs and Individuals Affected by the COVID-19 Outbreak
https://www.bnm.gov.my/index.php?ch=en_press&pg=en_press&ac=5022&lang=en

Features of BNM’s Financing Facilities to Assist Malaysian SMEs
https://www.bnm.gov.my/documents/2020/Additionalmeasures.20200327.appendix.pdf

Grant Thornton - Second Economic Stimulus Package 2020
https://www.grantthornton.com.my/globalassets/1.-member-firms/malaysia/publications/tax/second-economic-stimulus-package-2020..pdf

Inception date: 01 May 2020 | Removal date: 31 Dec 2020

Loan guarantee

On 27 March 2020, the Malaysian Prime Minister announced a stimulus package of RM230 billion (~USD 53 billion). In the package, RM128 billion (~USD 29.6 billion) has been allocated for supporting individuals, RM100 billion (~USD 23 billion) for supporting businesses, including SMEs, and RM2 billion (~USD 461 million) to strengthen the economy.

As part of the package, an RM50 billion (~USD 11.54 billion) guarantee scheme has been announced for financing working capital requirements with a guarantee of up to 80% of the loan amount. The minimum guaranteed loan size will be RM20 million (~USD 4.6 million) per business. Companies can apply for financing from 1 May 2020 to 31 December 2020 or until the fund is fully utilized.

Additionally, the package also announced an income tax extension for all SME's, a wage subsidy program, and a program to allow deferment or restructuring of the employer contributions to the provident fund. These have not been included as they are beyond the scope of GTA.

* Malaysian Ringgit rates as on 27 March 2020 - RM4.33 / USD

AFFECTED SECTORS

 
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AFFECTED PRODUCTS

 
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Inception date: 27 Mar 2020 | Removal date: open ended

State loan

On 27 March 2020, the Malaysian Prime Minister announced a stimulus package of RM230 billion (~USD 53 billion). As part of the package, to support SME's and micro-entrepreneurs, the fund size of the All Economic Sector Facility has been increased from RM5.8 billion (~ USD 1.34 billion) to RM6.8 billion (~ USD 1.57 billion) to enhance access for financing SMEs. The AES Facility provides financing to SME's in all economic sectors, in particular underserved SMEs, for capital expenditures or working capital requirements. The interest rate is up to 7% per annum and the maximum financing amount is RM5 million (~ USD 1.15 million).

The facilities are only available for Malaysian SME's i.e. those that have at least 51% Malaysian ownership.

* Malaysian Ringgit rates as on 27 March 2020 - RM4.33 / USD

 
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Inception date: 01 Apr 2020 | Removal date: 30 Sep 2020

Tax or social insurance relief

On 27 March 2020, the Malaysian Prime Minister announced a stimulus package of RM230 billion (~USD 53 billion) for supporting businesses and individuals affected by the COVID-19 pandemic. As part of the package, an exemption is provided from payment of Human Resources Development Fund (HRDF) levy for all sectors for a period of six months from April 2020. This is expected to provide a savings of RM440 million (~USD 101 million). This exemption was earlier announced only for companies in the hotel and travel sector.

 
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Inception date: 27 Mar 2020 | Removal date: open ended

Loan guarantee

On 27 March 2020, the Malaysian Prime Minister announced a stimulus package to support businesses and individuals affected by the COVID-19 pandemic. As part of the package, for SME's with business records of less than 4 years or those that face difficulties in obtaining loans can access higher guarantee from the Credit Guarantee Malaysia Berhad (CGC) and the Syarikat Jaminan Pembiayaan Perniagaan (SJPP). SJPP will provide up to RM5 billion (~ USD 1.15 billion) worth of guarantees and the coverage has been increased from 70% to 80%.

* Malaysian Ringgit rates as on 27 March 2020 - RM4.33 / USD

 
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