National Recovery Plan MALAYSIA 2021 to revive Malaysian Economy

The Malaysian government unveiled more strategic details to the National Recovery Plan to supplement previously announced goalposts of "exiting" the Covid-19 pandemic in four phases.

The government initiatives aimed at compensating for income shortfalls and reducing monthly liabilities now include new categories of individuals such as non-Socso contributors (especially fresh graduates, school leavers, and informal sector workers), disabled people who have lost their jobs, or new categories of economic sectors such as nurseries, school canteen operators, sport industry operators, and travel agencies. This shows nicely that the Malaysian government is doing its research and fully aware of the people's needs.

For example, tax cuts from the current 24% to 18% with the per-existing schedule for the “marginal rate” (i.e. the next amount taxable out of the total amount) remain intact (which is 17% for the first RM600,000 payable) for the two fiscal years of 2021 and 2022 or even a bolder measure in the form of a total tax exemption for the same two fiscal years.

Lets check some highlights from the announcements highly helpful for local & foreigner both businessmen in Malaysia;

1. Govt unveils PEMULIH stimulus package worth RM150 billion, fiscal injection of RM10 billion.
2. Govt to give RM500 assistance to those who have lost their jobs, based on EPF, SOCSO data.
3. Govt allocates RM300,000 to MPs for food basket assistance to help affected groups in their respective constituencies.
4. Extension of electricity bill discounts for affected economic sectors for another three months — 10% discounts for October to December electricity bills.
5. An electricity bill discount of between 5-40% for domestic users — in accordance with electricity usage up to a maximum of 900kwh per month — worth RM346 million, to be given for three months.
6. RM18m allocation for local banks to provide 30 mobile banks nationwide.
7. Micro SMEs to receive additional assistance of RM500 in September and RM500 in November.
8. Govt to remove RM4,000 limit for the salary subsidy program, to provide a salary subsidy of RM600 per worker for four months.
9. Additional RM100 million under SME Digitization Grant for SMEs and micro SMEs to get matching grants of up to RM5,000 for purchase or subscription of digital systems.
10. One-off RM3,000 assistance to be given to sports facilities' operators.
11. Govt procurement procedures to be eased, variation of price to be allowed for projects affected by higher building materials cost.
12. Govt to allow withdrawal of RM1,000 per month for five months under EPF's i-Citra.
13. Affected insurance and takaful policyholders can apply for deferment of payment by opt-in until December 2021.
14. The six-month moratorium for all individual borrowers and micro-entrepreneurs — no documentation needed as all applications will be automatically approved.
15. Govt to allocate RM400 million to increase national vaccine supply to cover 130% of the population, from previous targeted 120%
16. Govt to allocate RM200 million for 29 new vaccination centers and to upgrade existing ones, as well as to introduce drive-through vaccination centers, mobile vaccination centers and to fund outreach home-to-home vaccination programs.
17. There will be RM150 million allocation for a public-private partnership immunization program (PIKAS).
18. Allowance for volunteer front liners to be increased to RM100 from RM50 per day, for those on duty for more than 12 hours per day starting June 2021.
19. Govt has agreed to postpone monthly income tax installment payments for companies and waive tourism, services taxes for hotel operators until year-end.
20. RM3,000 'one-off' assistance for more than 5,300 registered travel agencies to help them revive their businesses when the country moves to the Third Phase of PPN.
21. Govt implements price control based on crude palm oil threshold value to check price increase in 1kg-5kg bottled cooking oil.
22. Govt continues to maintain the retail price of RON95 petrol, diesel, and LPG, which is expected to involve a subsidy of more than RM6 billion this year.

According to a Standard Chartered Group study, MALAYSIA is ranked the “second most favorable country” for foreign investment in South-East Asia by European and US companies to establish or expand their sourcing,selling or operations over the next six to twelve months. Malaysia continues to be the famous investment destination for the manufacturing and global service sectors in Asia. Malaysia remains an attractive investment destination with favorable government business aids & an economical environment including the availability of excellent infrastructure, telecommunication services, financial and banking services, as well market opportunities offered through the 16 Free Trade Agreements (FTA).

According to MIDA it has identified 240 high-profile foreign investment projects including Fortune 500 companies in the manufacturing and services sectors, with a combined potential investment value of RM81.9bil. “Presently, Mida has also received RM47.7bil worth of potential investments into the country. These projects, once approved, are expected to be implemented within 2021 to 2022, ”. MIDA has also received RM47.7bil worth of potential investments into the country. These projects are expected to be implemented within 2022.

To start a business or buy a business in Malaysia you will need business licenses, specially if you are a foreigner, it's a must to have a Pvt. Ltd. or SDN BHD company. We are processing company registration, bank account, business licenses, accounts & taxes for you as experienced accountants, tax advisors, SST advisors & business investment advisors.

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