PEMERKASA+
TaxProgram Strategik Memperkasa Rakyat dan Ekonomi Tambahan (PEMERKASA+)
Responding to Coronavirus COVID-19
The COVID-19 pandemic is taking a toll on the Malaysian economy as well as many other countries around the world. Industries such as travel, leisure & hospitality, tourism, airline, retail and many more are severely affected by the pandemic.
Grant Thornton in Malaysia will constantly update relevant information including the advice to businesses to help you navigate through these difficult times.
To effectively control the current COVID-19 situation, the Malaysian government has implemented different-level Movement Control Order (MCO), ranging from high-risk to low-risk areas: Movement Control Order; Recovery MCO; Conditional MCO; Enhanced MCO; and Targeted Enhanced MCO.
- Phase 1 – MCO 1.0 from 18th March 2020 till 3rd May 2020
- Phase 2 - Conditional MCO from 4th May 2020 till 9th June 2020
- Phase 3 - Recovery MCO from 10th June till 31st December 2020
- Phase 4 – CMCO in the areas with high COVID-19 cases from 14th December 2020 till 31st December 2020
- Phase 5 – RMCO nationwide from 1st January 2021 till 31st March 2021; certain states with high COVID-19 cases were placed under MCO 2.0 from 13th January 2021 till 4th March 2021
- Current Measure – Full MCO 3.0 nationwide from 1st to 28th of June 2021
To help the people and businesses during lockdowns, the Malaysian government had introduced several stimulus packages.
On 27 February 2020, the Malaysian government had introduced the Economic Stimulus Package 2020 worth RM20 billion to ensure the economic risks associated with the outbreak is effectively addressed. On 16 March 2020, the Prime Minister had announced additional measures to enhance the Economic Stimulus Package 2020.
A second economic stimulus package worth RM250 billion was announced by on 27 March 2020 to strengthen the economy, as well as necessary measures to provide assistance to all Malaysians who are affected by the COVID-19 outbreak.
Further to the earlier Prihatin Rakyat Economic Stimulus Package, the Malaysian government announced additional measures valued at RM10 billion on 6 April 2020, aimed at helping businesses in particular SMEs to pull through this challenging period.
On June 9, 2020, Malaysia issued its fourth economic stimulus package, named the PENJANA, which is primarily aimed at helping businesses recover from the impact of the coronavirus pandemic. The package is valued at 35 billion ringgit. Some of the measures issued in PENJANA include new tax incentives, financial assistance for small and medium-sized businesses (SMEs), and job protection initiatives.
On January 18, 2021, Malaysia’s government launched PERMAI, a stimulus package valued at 15 billion ringgit aimed at providing vital support to businesses through various incentives in addition to strengthening the country’s welfare programs.
PEMERKASA+ is a response to the national lockdown measures, which were enforced from June 1, 2021, focused on three aspects: increase public healthcare capacity, continuing welfare programs, and supporting businesses. This includes 2.1 billion ringgit in grants to small businesses, loan moratoriums, and wage subsidies. The country has rolled out over 340 billion ringgit in stimulus measures to cushion the economic impact caused by the pandemic.
On June 28, 2021, Malaysia announced its latest economic stimulus package, named PEMULIH, in response to the indefinite extension of the national lockdown. The 150 billion-ringgit package includes 10 billion ringgit in direct- fiscal spending by the government in the form of wage subsidies, unemployment assistance, and cash aid.
Economic Stimulus Packages
Perlindungan Ekonomi dan Rakyat Malaysia (PERMAI) Assistance Package
TaxThe Perlindungan Ekonomi dan Rakyat Malaysia (PERMAI) assistance package that is valued at RM15 billion has been announced by the Government. There will be a total of 22 initiatives implemented under the PERMAI assistance package.
Short-term Economic Recovery Plan (PENJANA) – Tax Measures
TaxAs Malaysian enters the Recovery stage, an economic recovery plan known as Pelan Jana Semula Ekonomi Negara (PENJANA) has been introduced by the Government. Our Adviser on Short-term Economic Recovery Plan (PENJANA) issued earlier is updated following further information released by the Ministry of Finance.
Short-term Economic Recovery Plan (PENJANA) – Tax Measures
TaxThe spread of the Covid-19 has been a global challenge socially and economically, and Malaysia is not spared from the crisis. In order to overcome the Covid-19 crisis, the Government has taken a strategy comprising of six approaches known as 6R - Resolve, Resilience, Restart, Recovery, Revitalise and Reform. As Malaysian enters the Recovery stage, an economic recovery plan known as Pelan Jana Semula Ekonomi Negara (PENJANA) will be introduced by the Government. This Adviser highlights the various tax measures that were announced as part of the initiatives of the PENJANA.
Updated Economic Stimulus Package 2020
TaxThere were changes made to the proposals announced previously on the Malaysia Economic Stimulus Package 2020. We have updated our Adviser to incorporate the amendments.
Second Economic Stimulus Package
TaxA second economic stimulus package was announced by the Malaysia government on 27 March 2020 to strengthen the economy, as well as necessary measures to provide assistance to all Malaysians who are affected by the COVID-19 outbreak and the movement control order from 18 March 2020 to 14 April 2020.
Additional measures of economic stimulus package
TaxThe spread of the Covid-19 has been a global challenge socially and economically, and Malaysia is not spared from the crisis. In order to overcome the Covid-19 crisis, the Government has taken a strategy comprising of six approaches known as 6R - Resolve, Resilience, Restart, Recovery, Revitalise and Reform. As Malaysian enters the Recovery stage, an economic recovery plan known as Pelan Jana Semula Ekonomi Negara (PENJANA) will be introduced by the Government. This Adviser highlights the various tax measures that were announced as part of the initiatives of the PENJANA.
MFRS related
MASB extends COVID-19 rent related concessions
MFRSThe Malaysian Accounting Standards Board (MASB) has issued ‘Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendment to MFRS 16)’, an extension to the practical expedient period in the amendments to MFRS 16 ‘Leases’ made last year. This extension is for one year, so the application period now extends until 30 June 2022.
COVID-19: Hedge accounting insights
MFRSThere are several accounting considerations the COVID-19 pandemic has triggered in relation to MFRS 9. In our view one of the most significant is in relation to hedge accounting and highly probable cash flows.
COVID-19: Financial Reporting and Disclosures
MFRSThe novel coronavirus (COVID-19) pandemic is spreading around the globe rapidly. The virus has taken its toll on not just human life, but businesses and financial markets too, the extent of which is currently indeterminate. Entities need to carefully consider the accounting implications of this situation.
Reporting the impact of COVID-19 on your business
MFRSAs the impact of a novel strain of coronavirus (COVID-19) continues to unfold around the world, those individuals responsible for preparing financial statements and approving them for issue need to be cognisant of not only what has happened and is happening at the reporting date and the time the financial statements are approved, but also what is likely to happen next.
Accounting implications of the Coronavirus (COVID-19)
MFRSAs Coronavirus is becoming more widespread, it is important that businesses consider the accounting implications as a result of the impact it is having on their business.
COVID-19: Hedge accounting insights
MFRSThere are several accounting considerations the COVID-19 pandemic has triggered in relation to MFRS 9. In our view one of the most significant is in relation to hedge accounting and highly probable cash flows.
Bursa Malaysia, SSM related
Bursa Malaysia announces additional relief measures
AnnouncementDue to the further extension of Movement Control Order (“MCO”) announced by the Government on 25 March 2020, Bursa Malaysia had on 26 March 2020 announced additional relief measures to alleviate the impact of Covid-19 on capital market players.
SC and Bursa Malaysia Announce Additional Temporary Relief Measures for Listed Issuers
AnnouncementThe Securities Commission Malaysia and Bursa Malaysia Berhad today announced temporary relief measures for listed issuers in addition to those introduced in 2020. These additional measures will allow listed issuers more time to prepare their financial statements and put in place regularisation plans amid the Covid-19 pandemic.
Practice Directive No. 6/2020 (Revised 27 January 2021)
AnnouncementIn support of the Government's initiatives to ease the economic pressures faced by the corporate community arising from the Covid pandemic, Companies Commission of Malaysia (“SSM”) had on 7 April 2020 (Revised 27 January 2021) issued Practice Directive No. 6/2020 to clarify the special procedures for companies to apply for an extension of time to hold an AGM or to submit a financial statement and reports
Bursa Malaysia Grants One Month Extension of Time
AnnouncementBursa Malaysia Securities Berhad (“Bursa Malaysia”) is granting an extension of time of one month to listed issuers with financial year ending (“FYE“) on 31 March 2020 (“said Listed Issuers”) to issue their annual reports that include the annual audited financial statements and the auditors’ and directors’ reports (“AR”), which are due by 31 July 2020 under the Main Listing Requirements (“Main LR”) after considering that the said Listed Issuers may not have adequate time to prepare their AR which contains both financial and non-financial information. As such, the said Listed Issuer shall issue their AR by 31 August 2020 instead of 31 July 2020.
Practice Directive No. 6/2020 by SSM
AnnouncementIn support of the Government initiatives to ease the economic pressures faced by the corporate community arising from the Covid pandemic, Companies Commission of Malaysia (“SSM”) had on 7 April 2020 (Revised 15 April 2020) issued Practice Directive No. 6/2020 to clarify the special procedures for companies to apply for an extension of time to hold an AGM or to submit a financial statement and reports.
Additional temporary relief measures to listed issuers announced by Bursa Malaysia
AnnouncementDue to the second extension of the Movement Control Order (“MCO”) for another two weeks from 15 April until 28 April 2020 announced by The Government on 10 April 2020, Bursa Malaysia has on 16 April 2020 announced additional temporary relief measures to listed issuers.
Bursa Malaysia Announces Additional Relief Measures
AnnouncementDue to the further extension of Movement Control Order (“MCO”) announced by the Government on 25 March 2020, Bursa Malaysia had on 26 March 2020 announced additional relief measures to alleviate the impact of Covid-19 on capital market players.
Deferment of Holding of AGMs and Related Issues Amidst COVID-19 Outbreak
AnnouncementDue to the World Health Organization’s announcement on 11 March 2020, which categorised the COVID-19 outbreak as pandemic and the implementation of the Movement Control Order (“Order”) that is taking effect from 18 March 2020 to 31 March 2020 announced by Government on 16 March 2020; Companies Commission Malaysia (“SSM”), Securities Commission Malaysia (“SC”) and Bursa Malaysia Securities Berhad (‘the Exchange”), had on 16 March 2020 and 17 March 2020 respectively announced on the followings
Tax
FAQs issued by the IRBM during the MCO period
TaxFollowing the implementation of the Movement Control Order for the period 18 March 2020 to 31 March 2020 (‘this period”), the Inland Revenue Board of Malaysia has granted extended deadlines and introduced temporary operating procedures during this period on various income tax, real property gains tax and stamp duty matters.
Extension of various tax deadlines
TaxWelcome to Tax Alert, Grant Thornton Malaysia’s newsletter on the latest tax updates and information.
Deferment of tax instalment payment and revision of income tax estimation
TaxWelcome to Tax Alert, Grant Thornton Malaysia’s newsletter on the latest tax updates and information.
While there may be some industries that are more directly impacted by the virus – including health and aged care, education and tourism – and no way to predict how many people may contract the virus, all industries will face issues around supply chain, workforce and cash flow.
With specialists across business risk, business continuity, workforce, tax, compliance, supply chain and restructuring, we are here to help. This may be an assessment of your risk and cash flow, identifying alternative suppliers, or preparation for meetings with suppliers, banks or the related government agency to access additional support or extensions.
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Business continuity plans and crisis management
The current situation continues to evolve and businesses will need to remain agile and alert. A good starting point on creating a response to COVID-19 is the World Health Organisation’s technical guidance and the Department of Disease Control which has released guidelines on how to mitigate the spread of COVID-19.
Some areas to consider include:
Your people
- Have measures been put in place to support good hygiene and health for your people, including restrictions to international travel, advice on attending client meetings, site visits and events?
- Do you have a clearly communicated policy on what your people should do if they are feeling unwell – including seeking medical attention and isolation? What will this mean for colleagues and clients if you suspect a case of COVID-19?
Review your customers and suppliers
- Do you need to inform your clients and customers of any changes to your services? This could include different opening times, delays in deliveries or deadlines.
- Do you have plans in place to ensure regular and clear communications to clients about your policies and updates on changes to service?
- With international travel and export impacted by COVID-19, have you assessed the strength of your supply chain and do you have alternatives in place if you need to source another provider?
- Which customers will need extended terms from you and which suppliers might require different arrangements? Liaise with your suppliers to determine how they can support you.
Cash flow and financing
- Any changes or delays in service can have an impact on cash flow. Do you need to have discussions with clients or suppliers about renegotiating terms?
- Your banker will be invaluable in helping you over the next couple of months. Plan early if you are going to need additional funding to get restarted. Make sure your banker is across your plans and understands where you are going.
Check your insurance cover
- Re-assessing insurance coverage – businesses may have insurance coverage to protect certain assets, however, they should ensure they are covered for the business interruption expenses that natural disasters can cause.
Stakeholder management
- During these difficult periods, proactive stakeholder management becomes extremely important, in particular with financiers, shareholders, customers and employees. Communicate with these groups early and often!
Get advice and look after yourself and your people
- In addition to ensuring the health and safety of yourself and your people, we strongly encourage you to speak to your advisors about how your business can respond to COVID-19.
As always, we are here to support you in times of difficulty. With a multidisciplinary network of specialists, there are many ways we can assist you now and into the future.
