PRIHATIN Economic Stimulus Package – Employee & Employer        

" The Malaysian government will ensure the implementation of the 2020 economic stimulus package as announced previously with additional measures to mitigate the impact of the Covid-19 pandemic", Prime Minister Tan Sri Muhyiddin Yassin said.

The result of enforcing the MCO is that both employers and employees suffer adverse consequences. The prime minister is aware that both employers and employees will undergo difficulties. In a press conference on March 23 & March 27, Muhyiddin assured us that all Malaysians will reap benefits.

The government will prepare Bantuan Prihatin Nasional, a one-off cash allocation of nearly RM10 billion, which for the first time will also be channelled to the M40 group.

These include employees in the private sector, FELDA settlers, farmers, fishermen, small traders, and all those belonging to the M40 groups and below.

The total payment can be broken down into:

- RM1,600 to nearly 4 million households earning a monthly income of RM4,000 and below. Payment of RM1,000 will be paid in April 2020, and RM600 in May 2020.

- RM1,000 to almost 1.1 million households earning over RM4,000 to RM8,000. RM500 will be paid in April 2020, and the remaining RM500 in May.

- RM800 to 3 million single individuals 21 years old and above with a monthly income of RM2,000 and below. The RM500 payment will be paid in April 2020, and the remaining RM300 in May 2020.

- RM500 to 400,000 single individuals aged 21 years and over with monthly income of RM2,000 to RM4,000. A payment of RM250 will be made in April 2020 and the remaining RM250 in May.

- The Employees Provident Fund to allow them to withdraw up to RM500 a month for 12 months.

- Socso has also been instructed to entertain claims up to RM600 a month for six months under the Employment Insurance System.

- PTPTN relief: Loan payments deferred for three months

While employees will be cared for during this time, employers seem to have gotten the short end of the stick.

The government announced some special packages as following for employers to alleviate the burdens of employers:

· Wage Subsidy Programme: This program is introduced to help employers retain workers. This is so that employers can retain their employees and ensure that they still receive their salaries. Through this programme, the government will provide a wage of RM600/month for 3 months. It is aimed at employees earning less than RM4,000 and employers experiencing a 50% decrease in income since January 1, 2020.Muhyiddin also announced that employers must ensure that they do not dismiss employees or direct them to take unpaid leave for 3 months after the program is implemented.Also, employers are not allowed to deduct an employee’s existing pay. With an allocation of RM5.9 billion, the move is expected to benefit 3.3 million workers.

· Employer Consultation By EPF: First in line is the introduction of an employer consultation service by the EPF, slated to start on 15 April 2020. It will offer the option to defer or restructure and reschedule employers’ monthly EPF contributions. Once executed, this initiative is expected to help employers save an estimated RM10 billion. It will also benefit more than 480,000 SMEs and businesses, as well as protect more than eight million jobs in the market.

· Human Resources Development Fund (HRDF) levies: The Government is also making an exemption on the Human Resources Development Fund (HRDF) levies for all sectors for six months starting April 2020. This is expected to ease companies’ cash flow and a total savings of RM440 million.

· Income tax instalment repayment: Lastly, the government is allowing a three-month deferment of income tax instalment repayment for all SMEs, starting from 1 April 2020. For those in other affected sectors, you can make amendments to the tax amount income incurred in the third, sixth, and ninth monthly instalments during your business period.

For further inquiries kindly visit LHDN website www.hasil.gov.my or contact Hasil Care Line LHDNM at 1-800-88-5436 or 603-77136666 (Overseas).

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