On 27 March 2020, the Prime Minister unveiled an additional Economic Stimulus Package (“ESP”) known as the Prihatin Rakyat Economic Stimulus Package (“PRIHATIN”) to further counter the effects of the extended Movement Control Order (“MCO”) due to the COVID-19 outbreak.

PRIHATIN Rakyat – The package, valued at RM250 billion, will benefit all Malaysians and provides much needed relief to not only the B40, but also those in the Economic Stimulus lower middle income group. It aims to help the Rakyat and businesses Package pull through these unprecedented challenging times. The package is designed based on 3 main thrusts and includes the RM20 billion measures which was announced in the First ESP: 1. RM128 billion to be used to protect the welfare and well-being of the Rakyat. 2. RM100 billion to support businesses including small and medium enterprises (“SMEs”). 3. RM2 billion to strengthen the nation’s economy.

28/03/2020 Below are the highlights under the PRIHATIN: Initiatives for Businesses and SMEs ▪ For SMEs in all sectors, the monthly tax instalment is allowed to be deferred for three months, starting from 1 April 2020 (Note: further clarity on the definition of SME is to be confirmed). This proposal is in addition to the First ESP announced on 27 February 2020, whereby companies in the tourism sector are allowed to defer their monthly income tax instalment payment.

▪ To assist the SMEs, including micro entrepreneurs, additional funds of RM4.5 billion has been allocated which comprises five main initiatives. The initiatives include amongst others, additional Special Relief Facility valued at RM3 billion for SMEs, etc.

▪ To help employers with their cash-flow, the EPF will introduce a program known as “Khidmat Rundingan Majikan” on 15 April 2020. This service would include options to defer payment, restructure and rescheduling the remittance of the monthly employer portion of the EPF contribution. This initiative would benefit SMEs and affected companies, besides saving more than 8 million employment.

▪ Exclusion of levy payments to Human Resource Development Fund (HRDF) for all sectors for six months beginning 1 April 2020. Below are the highlights under the PRIHATIN: Initiatives for Businesses and SMEs ▪ In appreciation to the banks for giving a deferment/moratorium on loan repayments etc., the Government has proposed that the income of the banks arising from interests or profits on their loans/financing facilities will be taxed when the income is received after the moratorium period.

▪ Moratorium on loans extended to TEKUN, MARA and cooperative as well as other government-related agencies that grant loans to SMEs, starting from 1 April 2020.

▪ The Government will focus on domestic investment activities that will maintain employment. The Government will also continue with the implementation of all projects stated in the 2020 Budget which includes ECRL, MRT2, etc. to ensure economic growth.

▪ The Ministry of Finance has been given directive through the “Unit LAKSANA” to ensure that the PRIHATIN valued at RM250 billion reaches all at the earliest. Below are the highlights under the PRIHATIN: Initiatives for the Rakyat and the Economy ▪ Cash handouts ✓ RM1,600 cash for households earning RM4,000 and below per month. ✓ RM1,000 cash for households earning between RM4,000 to RM8,000 per month. ✓ RM800 cash for unmarried individuals age 21 years and above earning RM2,000 and below per month. ✓ RM500 cash for unmarried individuals age 21 years and above earning between RM2,000 to RM4,000 per month. ✓ One-off payment of RM200 in May 2020 for each higher education students. ✓ One-off payment of RM500 in April 2020 for civil servants under Grade 56 and below, including contract workers. The same applies for retired civil servants. ✓ One-off payment of RM500 for e-hailing drivers

▪ Previously, PTPTN payments has been deferred for six months. The same applies for PTPK (Perbadanan Tabung Pembangunan Kemahiran) starting from 1 April 2020 to 30 September 2020.

▪ Withdrawal from PRS (Private Retirement Scheme) Account B is allowed up to RM1,500 without any tax penalty imposed during the period April to December 2020. Below are the highlights under the PRIHATIN: Initiatives for the Rakyat and the Economy ▪ Waiver of rental payment for six months for the B40 group renting at the PPR (Projek Perumahan Rakyat dan Perumahan Awam).

▪ All sectors will enjoy electricity bill discounts ranging from 15% to 50% depending on the usage of up to 600kw per month for six months from April 2020.

▪ Special fund of RM64.4 million for each “Pertubuhan Peladang Kawasan dan Pertubuhan Nelayan Kawasan” to develop short term food production that would be able to produce results in three to six months, to ensure food security.

▪ The Government will introduce “Program Subsidi Upah” to assist employers to retain their employees. Under this program, the Government will subsidise RM600 per month for each employees for three (3) months. This program is specifically for employees earning below RM4,000 and for employers experiencing a drop in their revenues by more than 50% since 1 January 2020. Below are the highlights under the PRIHATIN: Initiatives for the Rakyat and the Economy ▪ The Insurance and Takaful industry will bear the cost of RM300 for each policy holder who has been ordered by the Health Ministry to conduct COVID-19 tests in private hospitals or private labs. Also, a deferment of insurance premium payments or contributions will be offered to those policy holders affected by the COVID-19 outbreak.

▪ For the B40 group under the mySalam initiative, patients admitted to the hospital due to the COVID-19 outbreak can make a claim of RM50 per day for a maximum period of 14 days. This initiative is also extended to those quarantined as patients under investigation. Contact Our People

Marcus Tan Anand Chelliah Yohan Francis Managing Partner, Tax Services Executive Director, Tax Services Executive Director, Tax Services Asia Pacific Tax Leader Corporate Tax & Tax Incentive International Tax & Transfer Pricing E: [email protected] E: [email protected] E: [email protected] T: +60 3 2297 1000 T: +60 3 2297 1000 T: +60 3 2297 1000 DL: +60 3 2297 1521 DL: +60 3 2297 1093 DL: +60 3 2297 1096

Murugan Anbanantham Tay Siew Chu Sandra Saw Director, Tax Services Associate Director, Tax Services Associate Director, Tax Services Technical Corporate Tax & Personal Tax Corporate Tax & Sales Tax and Service Tax E: [email protected] E: [email protected] E: [email protected] T: +60 3 2297 1000 T: +60 3 2297 1000 T: +60 3 2297 1000 DL: +60 3 2297 1004 DL: +60 3 2297 1139 DL: +60 3 2297 1146 Contact details

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The information contained in this leaflet is based on current taxation laws and other related legislation, including proposals and measures contained in the PRIHATIN RAKYAT ECONOMIC STIMULUS PACKAGE announcement on 27 March 2020. Every effort has been made to ensure that the information contained in this leaflet is accurate and based upon our understanding and interpretation of the relevant information obtained from the stimulus Speech, Appendices and relevant sources, and is subject to the issuance of the relevant enactments.

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