RM35B Economic Recovery Plan

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Prime Minister Tan Sri Muhyiddin Yassin today unveiled the RM35 billion National Economic Recovery Plan (ERP) with the theme Together Revitalising the Economy.

The plan is focused on three core issues, which is to empower the people, propel businesses and stimulate the economy.

“The plan will cover 40 initiatives. Out of the RM35 billion, RM10 billion will be a direct fiscal injection. This is due to the fact that plenty of jobs and businesses are affected during the movement control order (MCO), and it will take time to recover the economy,” he said in a televised address today.

He revealed that up to June 2, the Statistics Department recorded that around 12.7 million or 83.5% of the workforce has started working as compared to only 10.2 million on May 17.

The also said that packages to stimulate the economy carried out by the government have saved more than 2.4 million jobs, reduced the cash flow burden of around 10 million people, and supported more than 300,000 companies.

Devised as the country is going through the Recovery phase after the outbreak of Covid-19 earlier this year, the short-term economic plan will be known as PENJANA and will include 40 different initiatives to help heal the economy.

Bernama
  • 300,000 OKU and single mothers listed with JKM are eligible for RM300 one-off payment which will be paid before Aidiladha.
  • The government will provide free RM50 Wallet for all Malaysians to go shopping.
  • Malaysians can now use public transport for an unlimited number of times for RM30 under #MY30 which will be available starting 15th June until the end of the year.
  • 1GB free internet from 8am to 6pm for news, education sectors and Covid-19-related news until 31st December this year.
  • E-vouchers will be available for those who order child-minders’ services online.
  • Up to a RM3,000 incentive of individual income tax for fees paid by parents to taska and tadika (kindergartens).
  • Those who are unemployed are entitled to a training allowance of up to RM4,000 even though they are not contributors under the Employment Insurance Scheme (EIS).
  • Companies/employers who hire fresh graduates will receive RM600 a month.
  • RM800 per month will be given to employers or companies who hire unemployed professionals under the age of 40 for a total of 6 months.
  • RM600 per month will be given to companies who hire unemployed professionals over 40 years of age or the OKU for a total of 6 months.
  • Subsidy programmes will be extended to three months (RM600) per employee for all industries applicable.
  • Employers who are not allowed to operate during the conditional movement control order (MCO), are allowed to apply for the wage subsidy programme.
  • Employers who provide benefits for employees such as smartphones, laptops, tablets or purposes involving working from home may receive a tax deduction of up to RM5,000 per staff.
  • In an effort to promote MDeC freelancing, RM25 million will be allocated to the Global Online Workforce (GLOW)

Other initiatives

  • Banking sector allocates RM2 billion to assists SMEs, where applications begin mid-June, with a threshold of RM500,000 per SME.
  • Cash-flow aid by SME Bank for G2 and G3 contractors that have been awarded minor government projects.
  • RM400 million to fund Penjana microcredit by Tekun and Bank Simpanan Nasional with RM50 million allocated especially for female entrepreneurs.
  • Penjana Nasional fund worth RM600 million to drive the process of digitalisation of businesses and innovation. A matching fund will be matched by local and international investors.
  • RM100 million to set up the National Technology and Innovation Sandbox to further complement the digitalisation effort. This includes testing new technologies such as the delivery of online purchases through drones and usage of self-driving vehicles.
  • Campaign Shop Malaysia Online to encourage trade via e-commerce platforms using promo codes and discount vouchers. Government allocating RM70 million, which would be matched by e-commerce platforms.
  • RM75 million allocated to draft policies related to the gig economy.
  • RM50 million matching grant for gig economy workers’ EPF and Socso contribution.
  • RM1 billion for the tourism industry under Penjana Tourism Funding to ensure that the country’s tourism industry can still be competitive in the new normal.
  • Full exemption of tourism tax from July 1,2020, until June 30, 2021.
  • Exemption of services tax on lodgings and accommodation services extended from Sept 1,2020 until June 30, 2021.
  • Additional RM50 million to the Malaysian Investment Development Authority (Mida) for promotional and marketing activities.
  • RM10 million allocated to the Malaysian Global Innovation and Creativity Centre (MaGIC) to fund social enterprises for social projects to address issues faced by vulnerable groups.
  • The government will give 100 percent sales tax exemption on sale of domestic passenger cars, 50 percent for passenger cars imported from June 15, Dec 31, 2020.
  • Reintroduction of Home Ownership Campaign: To boost the sluggish property sector, the government is waiving stamp duties on loan agreements and ownership transfer documents for residential units worth RM300,000 to RM2.5 million.
NST

The waivers on stamp duties on 14 types of ownership transfer documents is limited to the first RM1 million of the value of the residential property.

A full waiver, however, is given for stamp duties on loan agreements on sale between June 1, 2020 to May 31, 2021 but it will be dependent on two conditions:

  1. that there is a 10% discount by developers.
  2. exemption on real property gains tax to individual Malaysian citizens on the sale of residential properties between June 1, 2020 to December 31, 2021.

Also, the 70% ceiling on financing from banks has been temporarily suspended for an individual’s third loan to buy residential properties worth more than RM600,000.