Prime Minister Tan Sri Muhyiddin Yassin has announced a new RM15 billion ‘Perlindungan Ekonomi dan Rakyat Malaysia’ (PERMAI) stimulus package on 19 January 2021, covering 22 initiatives with the following three main objectives:

1. Combatting the Covid-19 outbreak
2. Safeguarding the welfare of the people
3. Supporting the business continuity

The initiatives include measures to:

1. Secure employments
2. Relief SME’s cash flow burdens
3. Reduce business commitment
4. Protect employees from Covid-19

Key Highlights of PERMAI assistance package in supporting business continuity include:

1. HRDF levy exemption for companies unable to operate during the Movement Control Order (MCO) and Conditional Movement Control Order (CMCO) periods.
2. All employers (all sectors) operating in the MCO states are eligible to apply for Wage Subsidy 3.0 of RM600 per employee for one month.
3. Special tax deduction for company providing a reduction of at least 30% of the business premises rental to both SMEs and Non-SMEs from the original rental rate until 30 June 2021.
4. Temporary Measures for Reducing the Impact of Covid-19 Act 2020 has been extended. The effective period of inability to perform contractual obligations by individuals and businesses has been extended to 31 March 2021.
5. Maximum financing of RM1 billion for the Danajamin Guarantee Scheme with the expanded scope of financing covering working capital up to 10 years. This scheme also allows foreign-owned companies operating in Malaysia to obtain this guarantee with the requirement that 75% of the workforce are Malaysian.
6. Special discount of 10% on electricity bills from January to March 2021 for the following business sectors: hotel operators, theme parks, convention centres, shopping malls, local airlines offices as well as travel and tour agencies. In addition, electricity rebates will be given to domestic and non-domestic users at a rate of 2 Sen per kilowatt-hour, equivalent to a 9% reduction in electricity bills from 1 January until 30 June 2021.

The summaries below provide a good overview of the PERMAI assistance package:

1. PwC TaXavvy, Issues 3-2021 | Perlindungan Ekonomi & Rakyat Malaysia Assistance Package (PERMAI)
2. Grant Thornton Tax Alert | Perlindungan Ekonomi dan Rakyat Malaysia (PERMAI) Assistance Package
3. EY Tax Alert (Special Edition) | PERMAI Assistance Package
4. Deloitte Tax Espresso – Special Alert | PERMAI Assistance Package – Tax Related Measures
5. Bakertilly Tax Bulletin 19 Jan 2021 | PERMAI (Perlindungan Ekonomi & Rakyat Malaysia) Assistance Package

Full speech of the PERMAI Assistance Package is available here.

Summaries and full speech of Budget 2021 are available here.

Photo by Florian van Duyn on Unsplash.