PEMERKASA Plus Assistance Package 2021

Announced on 31 May 2021

Foreword

The year 2021 was touted by many observers to be a year of recovery, where businesses operating in a post-Covid-19 world would feel a sense of relief after the implementation of record breaking stimulus packages and the largest global vaccination campaign in history. In Malaysia, the government’s response has been in line with global trends. With an estimated RM340 billion ringgit in economic stimulus being implemented since the pandemic surfaced in Malaysia, the economy has responded positively, exhibiting increased resilience over the past year.

Despite the steady progress, the resurgence of the Covid-19 pandemic on our shores over the past few months has resulted in a challenging business environment. The Malaysian government has once again implemented a strict lockdown, akin to the first announced in March 2020, as it looks to stabilize the situation in Malaysia and chart a clear path forward. While the government attempts to strike a delicate balance between lives and livelihoods, support is needed to help keep the engines of the economy running during these tough times.

In a specific response to the current situation, the government of the day has introduced the RM40 billion PEMERKASA Plus economic stimulus package, addressing the three areas of concern – healthcare capacity, people’s welfare and business continuity. For businesses in particular, greater support has been provided in terms of access to grants, microcredit loans, special tax exemptions and reductions as well as utilities discounts. Such initiatives may prove to be the difference maker for some businesses, providing them a much needed economic lifeline as they traverse the labyrinth of economic challenges created by this pandemic.

PEMERKASA Plus Assistance Package2021: Key Highlights at a Glance

Appeals on imposition of penalties, application for deferment of penalty payments and instalment plans for outstanding taxes payable of affected taxpayers and businesses will be considered.
The period of claiming special deduction on rental discounts given by landlords of private business premises to Small and Medium Enterprises (SME) and non-SME will be extended to 31 December 2021.
Exemption for Tourism Tax and Service Tax will be extended until 31 December 2021.
Prihatin Special Grant will be increased from RM1,000 to RM1,500.
Stamp duty exemption on the instruments of transfer and loan agreements for the purchase of residential homes will be extended until 31 December 2021.
The period of full Sales Tax exemption for purchase of locally assembled cars and 50% exemption of Sales Tax for purchase of imported passenger cars will be extended until 31 December 2021.
The HRDF (Human Resource Development Fund) levy payment for the month of June 2021 will be exempted.
10% electricity bill discounts will be provided to affected sectors from July 2021 to September 2021.

Key Tax Measures & Subsidies for Businesses

Rental Discount

Landlords who are entitled to the special deduction for rental discounts given to SME tenants can also now claim relief if the rental discount is given to non-SME tenants. The eligibility period is extended to 30 June 2021

COVID-19 Act 2020 Contractual Obligations

Businesses and individuals are relieved from performing their contractual obligations under the COVID-19 Act 2020. The effective period has been extended to 31 March 2021.

Enhanced Wage Subsidy Programme (WSP 3.0)

Employers from all sectors which operate in the MCO states are allowed under WSP 3.0 to apply for a subsidy of RM600 per employee in respect of employees who earn RM4,000 or below per month (subject to a maximum of 500 employees). The WSP 3.0 is applicable for a period of one month.

Prihatin Special Grant Plus for SMEs

500,000 SMEs in the 7 MCO states will be paid RM1,000 each and 300,000 SMEs in other states will be paid RM500 each. The payments are funded by an additional allocation of RM650 million under the expansion of the Prihatin Special Grant Plus assistance scheme.

Purchase of passenger cars

Buyers of passenger cars are eligible for full Sales Tax exemption if they purchase locally assembled cars or 50% Sales Tax exemption if they purchase imported passenger cars. The exemption is extended to 30 June 2021.

Shorter ownership period for disposal of taxis

Taxi owners who dispose of their taxis are exempted from Excise Duty and Sales Tax if they own the taxi for a period of at least 5 years (previously 7 years). This relaxation is effective from 1 January 2021 to 31 December 2021.

Key Tax Measures & Subsidies for Individuals

Cost of COVID-19 screening

Individuals are allowed tax relief of RM1,000 for medical examinations which are now expanded to include the cost of COVID-19 screening. This relief is effective from Year of Assessment 2021.

Purchase of mobile phones, computers and tablets

Resident individuals are eligible for a special tax relief of up to RM2,500 on the purchase of mobile phones, computers and tablets. This relief is extended to 31 December 2021.

Bantuan Prihatin Nasional (BPN 2.0) & Bantuan Prihatin Rakyat (BPR)

The final payment of the BPN 2.0 will start from 21 January 2021. Under Phase 1 of the BPR, households earning up to RM5,000 per month will receive RM300 each while single individuals earning up to RM2,000 per month will receive RM150 each as the first instalment payment.