Covid-19: Government enhances relief for SMEs under Prihatin SME+

On 27 March 2020, the Malaysian Government announced the Pakej Rangsangan Ekonomi Prihatin Rakyat (‘Prihatin’), a relief and economic stimulus package to assist individuals and businesses to weather the economic challenges brought about by the Covid-19 outbreak.
The Prihatin package, valued at RM250 billion, is in addition to the stimulus packages announced by the Malaysian Government on 27 February 2020 and 23 March 2020. Our summary of Prihatin and the earlier measures are available here, here and here.
Prihatin included initiatives valued at RM100 billion to support businesses, including Small and Medium Enterprises (‘SME’). After receiving feedback from stakeholders, the Government announced the Prihatin SME+ (‘Prihatin SME+’) package on 6 April 2020.  
The Prihatin SME+ is not only a modification of certain reliefs under Prihatin but increases the financial assistance to SMEs by RM10 billion.
The highlights of Prihatin SME+ are as follows –

1. Extension of Wage Subsidy Programme
The RM5.9 billion allocated to the Wage Subsidy Programme (‘WSP’) under Prihatin has been increased by RM7.9 billion to RM13.8 billion. The relief under the WSP has been modified and expanded as follows –
  • For companies with more than 200 employees, the Government will provide a wage subsidy of RM600 per month for every employee, subject to a limit of 200 employees being eligible to claim such benefit;
  • For companies with 75 to 200 employees, the Government will provide a wage subsidy of RM800 per month for every employee;
  • For companies with less than 75 employees, the Government will provide a wage subsidy of RM1,200 per month for every employee.

As previously announced, the subsidy will be for a period of three months and will only apply to employees earning less than RM4,000 per month.
To qualify for the assistance under the WSP, an employer must –
  1. be registered with the Companies Commission of Malaysia1 (‘CCM’) or local authorities before 1 January 2020;
  1. be registered with the Social Security Organisation (SOCSO); and
  1. retain its employees for at least six months, i.e. the three month duration of the WSP and another three months thereafter.
Under Prihatin, an employer must also show that it has suffered a decrease of more than 50% in its income since 1 January 2020.

2. Special Prihatin  Grant for Micro Enterprises
A grant of RM3,000 will be provided to eligible micro enterprises. A micro enterprise is required to register with the Inland Revenue Board to qualify for this grant. The CCM and local authorities will provide a list of eligible micro enterprises to the Government.2

3. Soft loans
The interest rate for the Micro Credit Scheme administered by Bank Simpanan Nasional will be reduced from 2% to 0%. The soft loan scheme for micro enterprises is also extended to TEKUN Nasional, with a maximum loan limit of RM10,000 at 0% for each micro enterprise.

4. Waiver or discount on rent by retail SMEs by GLCs
Certain Government-Linked Companies (GLCs), such as Petronas, MARA, PNB and UDA, and several State Governments have agreed to grant waivers or discounts to their tenants which are SMEs in the retail sector.

5. Tax relief for landlords granting waivers or discounts to SMEs
Landlords of buildings or business premises who grant waivers or at least 30% discount on rent for three months (April to June 2020) to their tenants which are SMEs will be given a tax deduction equal to the amount of rent reduction or waived.

6. Reduction on foreign workers’ levy
A 25% reduction of the levy payable for foreign workers will be granted to all companies with foreign workers’ permits expiring between 1 April to 31 December 2020. This waiver is not applicable to the domestic help sector.

7. Relaxation of CCM filing deadlines
A 30-day moratorium will be granted on filing of documents with the CCM. The moratorium will commence when the Movement Control Order ends.
Further, companies with financial years ended 30 September to 31 December 2019 will be granted a 3-month extension to lodge their financial statements. These companies are required to apply to the CCM for this extension with no fees being imposed.

1 Presumably, the employer can be a company, limited liability partnership or a business registered with the CCM. This raises a question whether professional services firms, like law firms, which are registered under the legislation that governs their profession, will be eligible for the WSP.
2 The announcement on Prihatin SME+ did not specify the qualifying criteria for micro enterprises.