28/03/2020

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.

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

lower middle income group. It aims to help the Rakyat and businesses

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.

PRIHATIN Rakyat –Economic Stimulus Package

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 continuewith 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.

Below are the highlights under the PRIHATIN:

Anand Chelliah

Managing Partner, Tax Services

Asia Pacific Tax Leader

E: anand.chelliah@bakertilly.my

T: +60 3 2297 1000

DL: +60 3 2297 1093

Murugan Anbanantham

Director, Tax Services

Technical

E: murugan.anbanantham@bakertilly.my

T: +60 3 2297 1000

DL: +60 3 2297 1004

Marcus Tan

Executive Director, Tax Services

Corporate Tax & Tax Incentive

E: marcus.tan@bakertilly.my

T: +60 3 2297 1000

DL: +60 3 2297 1521

Tay Siew Chu

Associate Director, Tax Services

Corporate Tax & Personal Tax

E: siewchu.tay@bakertilly.my

T: +60 3 2297 1000

DL: +60 3 2297 1139

Yohan Francis

Executive Director, Tax Services

International Tax & Transfer Pricing

E: yohan.xavier@bakertilly.my

T: +60 3 2297 1000

DL: +60 3 2297 1096

Sandra Saw

Associate Director, Tax Services

Corporate Tax & Sales Tax and Service Tax

E: sandra.saw@bakertilly.my

T: +60 3 2297 1000

DL: +60 3 2297 1146

Contact Our People

Head Office

Kuala Lumpur Baker Tilly Tower,Level 10, Tower 1, Avenue 5,Kampung Kerinchi, 59200 Kuala Lumpur.T: +6 (0) 3 2297 1000F: +6 (0) 3 2282 9980info@bakertilly.mywww.bakertilly.my

Branch Office

Johor – Batu PahatNo. 33, Jalan Penjaja 3,Kim's Park Business Centre,83000 Batu Pahat, Johor.T: +60 7431 5403F: +60 7431 4840

Johor – Johor Bahru157-B, Jalan Sri Pelangi, Taman Pelangi,80400 Johor Bahru, Johor.T: +60 7332 6925 / 6926F: +60 7332 6988

Labuan1st Floor, U0509,Lazenda Commercial Centre,Phase 11, Jalan Tun Mustapha,87000 Federal Territory of Labuan.T: +60 8744 0800

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.

© Baker Tilly Malaysia. All rights reserved. Baker Tilly Malaysia and its related entities in Malaysia trading as Baker Tilly is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal

entities.

Penang9-2, 9th Floor, Wisma Penang Garden,42, Jalan Sultan Ahmad Shah,10050 Penang.T: +60 4227 9258F: +60 4227 5258

Negeri Sembilan – SerembanLevel 2, Wisma Sim Du,37, Jalan Dato' Bandar Tunggal,70000 Seremban, Negeri Sembilan.T: +60 6762 2518 / 763 8936F: +60 6763 6950

Sabah – Kota KinabaluSuite No. 1-6-W2, 6th Floor,CPS Tower, Centre Point Sabah,No. 1, Jalan Centre Point,88000 Kota Kinabalu, Sabah.T: +60 8820 4941 / 943F: +60 8820 4942

Sabah – TawauNo. 194, 2nd Floor, Block B,Wisma DS, Jalan Bakau, 91000 Tawau, Sabah.T: +60 8977 1040F: +60 8976 4131

Phnom Penh (Cambodia)No. 87, Street 294,Sangkat Boueng Keng Kang I,Khan Chamkarmon, Phnom Penh, Cambodia.T: +855 2398 7100F: +855 2398 7388info@bakertilly.com.khwww.bakertilly.com.kh

Contact details