To All Members
BUSINESS CONTINUITY IS KEY FOCUS OF GOVERNMENT’S NEW RM15 BILLION PERMAI STIMULUS PACKAGE; ACCOUNTANTS POSITIONED TO HELP ADVISE BUSINESSES ON FINANCIAL MANAGEMENT, BUSINESS CONTINUITY AND FINANCIAL REPORTING OF COVID-19 IMPLICATIONS
Yesterday, Prime Minister Tan Sri Muhyiddin Yassin announced a new economic assistance package worth RM15 billion to mitigate the impact of COVID-19. The PERMAI (Perlindungan Ekonomi dan Rakyat Malaysia) package will include 22 new initiatives based on three main objectives – to combat the COVID-19 pandemic, to protect the people’s welfare and to support business continuity.
Initiatives on business continuity are of particular interest, as accountants serve as advisors to businesses on financial management, business continuity and financial reporting, especially small and medium entities beleaguered by the COVID-19 pandemic.
“MIA members are encouraged to provide value-added services to their clients and organisations by helping them to navigate through the initiatives and to apply for the different incentives and exemptions available, such as loan moratoriums, microcredit and transition to online e-commerce platforms. This is how accountants and the profession can demonstrate their continuing value and relevance to businesses, by supporting business continuity,” stated MIA CEO Dr. Nurmazilah Mahzan in responding to the Prime Minister’s statement on PERMAI.
In particular, she advised members involved in the preparation and audit of MFRS and MPERS financial statements to pay close attention to the financial reporting implications and issues arising from COVID-19 impacts and initiatives. These include going concern and accounting for impairment of assets and non-financial assets. Guidance on financial reporting for MPERS entities, including COVID-19 issues and implications, can be found in MIA’s newly launched inaugural e-book, the Interactive e-Book of the MIA Illustrative MPERS Financial Statements, with Commentaries and Guidance Notes as well as through various circulars issued by the Institute.
Below are highlights of the key initiatives on supporting business continuity that are especially relevant for MIA members:
Initiative 13: Improving the Wage Subsidy Program
- Enhanced Wage Subsidy Program 3.0 under SOCSO for all employers operating in the MCO states. Eligible employers will receive a wage subsidy of RM600 for each of their employees earning less than RM4,000 for a period of one month. The wage subsidy limit of 200 employees for each employer will be increased to 500 employees.
- For those who suffered loss of employment during the MCO enforcement, the Government has agreed to ease the conditions for the Employment Insurance System program or SIP PRIHATIN. Employees who do not meet the minimum contribution conditions, or whose contract was not extended after having been renewed for at least 3 times previously, are now eligible to apply for the SIP PRIHATIN assistance amounting to 30 percent of their monthly salary for a period of 3 months.
Initiative 14: Continuation of the Prihatin Special Grant
- An expansion of the Prihatin Special Grant Plus assistance to cover 500,000 SMEs in the seven MCO states with a payment of RM1,000 each, while 300,000 SMEs in other states will receive RM500 each. The expansion of this additional special grant or the PERMAI Prihatin Special Grant, involves an additional allocation of RM650 million.
Initiative 16: Accelerating the Implementation of Microcredit Schemes
- The Government will expedite the implementation of microcredit schemes that had been announced previously. The implementation of RM1 billion microcredit facilities include soft loans amounting to RM390 million by Bank Simpanan Nasional, RM350 million by Agrobank and RM295 million by TEKUN.
Initiative 17: Supporting and Boosting Online Businesses
- To continue the support for entrepreneurs and businesses in generating income through online sales or e-commerce platforms, the Government will accelerate the implementation of the SME and Micro SME e-Commerce Campaign and Shop Malaysia Online campaign, with a total allocation of RM300 million.
Initiative 18: Enhancing the Danajamin PRIHATIN Guarantee Scheme
- Under the PENJANA package, the Government announced the Danajamin Guarantee Scheme, or SJPD amounting to RM50 billion, to support the private sector’s growth and boost the country’s economy.
Initiative 19: Rescheduling and Extending the Moratorium Period for MARA Loans and MARA Premises Rental
- MARA will continue its MARA PRIHATIN Peace of Mind 2.0 program, where borrowers can apply to reschedule the repayment of MARA education loan facilities, or for business loan moratorium until 31 March 2021. MARA entrepreneurs affected by COVID-19, MCO and the floods can apply for the MARA business financing rescheduling programme. In addition, MARA has agreed to provide a 30 percent rental discount on business premises for a period of six months from November 2020 to April 2021.
- A special tax deduction to any company that provides a reduction of rental on business premises to SMEs of at least 30 percent from the original rental rate from 1 April 2020 to 31 March 2021. This special deduction period will also be extended until 30 June 2021. In addition, the Human Resources Development Fund will exempt the employer levy for companies that are unable to operate during the MCO and CMCO periods.
Initiative 22: Extending the Temporary Measures for Reducing the Impact of COVID-19 Act 2020
- An extension of the Temporary Measures for Reducing the Impact of COVID-19 Act 2020, or Act 829, to 31 March 2021. The Act was enacted to assist individuals and businesses that were economically impacted by the COVID-19 outbreak. This includes hire purchase or lease contracts and credit sales contracts which benefit groups such as the B40, M40 and micro enterprises who are unable to meet their contractual obligations.
For more information, please click HERE for the Prime Minister’s speech.
MIA appreciates the Government’s continued efforts to support the people during these challenging times and hopes that our members and member firms will benefit from these initiatives.
The Institute will continue to closely monitor the situation, maintain close communication with the relevant authorities and our stakeholders, and notify members of any future developments.
#STAYSAFE #ACCOUNTABILITY #INTEGRITY
DR. NURMAZILAH DATO’ MAHZAN
Chief Executive Officer