As acknowledged by the government, the most immediate economic impact of the Covid-19 disease has been the sharp decline in tourism. To assist businesses that have been adversely affected by the epidemic, the government has proposed several initiatives under the Economic Stimulus Package 2020.
Firstly, the government will allow the deferment of monthly income tax instalment payments for businesses in the tourism sector. In addition to this, companies who are affected by Covid-19 will be allowed to revise their profit estimates for 2020 – with respect to monthly income tax instalment payments – without any penalties.
Hotels, travel agencies, airlines, shopping malls, and convention and exhibition centres will be provided with a 15% discount in electricity bills to help cut down on monthly overhead costs. Hotels and travel-related companies will also be exempted from Human Resource Development Fund (HRDF) levies.
The above initiatives will take place for a period of 6 months starting from April to September 2020. However, the government will also be exempting hotels from the 6% service tax, and this particular initiative will kick in earlier than the rest from March to August 2020.
The assistance provided by the government is not limited just to the tourism industry. The government is also providing financing facilities for other affected companies, with the following moves:
- A special relief facility worth RM2 billion provided by Bank Negara Malaysia (BNM). This relief facility will be in the form of working capital for SMEs at an interest rate of 3.75%.
- An allocation of RM200 million in microcredit facility by Bank Simpanan Nasionala (BSN), offering a 4% interest rate to affected businesses. The approval process for existing loan funds will be further streamlined, eg Bank Pembangunan’s Tourism Infrastructure Fund of RM1.5 billion.
Furthermore, all banks are required to provide financial relief in the form of a payment moratorium that allows restructuring and rescheduling of loans for affected businesses and individuals. BNM has been tasked to ensure that all financial institutions will assist all companies in need with no exceptions.
Finally, the government is calling on industry players to play their part in sharing the responsibility to overcome current challenges. According the government, hotels could offer discounts and shopping malls could reduce rental rates for their tenants. For example, Malaysia Airport Holdings Berhad (MAHB) will be providing rebates on rental for premises at the airport as well as landing and parking charges.