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.
Following the COVID-19 outbreak and the recent spike in COVID-19 cases in Malaysia, the Prime Minister of Malaysia has announced a Movement Control Order on 16 March 2020 as a measure to curb the outbreak. Malaysians are barred from traveling overseas while visitors are not allowed to enter the country. It also involves the closure of all government and private premises except for those providing essential services. This Order will last for two weeks, starting from 18 March 2020 to 31 March 2020 and is effective nationwide.
On 25 March 2020, the Movement Control Order (MCO) is extended for another two weeks till 14 April 2020.
The deadline to file a tax return for individual taxpayers (who are not self-employed) is extended from 30 April to 30 June. The Central Bank has also issued a moratorium for affected individuals to delay the repayment of existing loans, including mortgages, for a period of six months. This deferment, however, only applies to individuals whose loans/financing are not in arrears exceeding 90 days as at 1 April 2020. Further initiatives will be announced in due course.
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:
- 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.
- 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.