KUCHING, March 30: The Malaysian Bar Council has urged the government to assist law firms with financial support, including subsidising their staff salaries, in the wake of prolonged movement control order (MCO).
Its president Salim Bashir said such measure was necessary, as there were no such provision under the RM250 billion Prihatin stimulus package announced by Prime Minister Tan Sri Muhyiddin Yassin last Friday (March 27).
“The provisions made for law firms are wholly insufficient. The domino effect of the MCO period on the economy requires much stronger support from the government in bolstering law firms. There are liabilities to meet, as well as salaries and bills to pay. Even prior to the MCO, several legal firms were already facing dire financial situations and have had to dip into their reserves.
“The Malaysian Bar would therefore welcome additional funding, as a special relief facility for law firms, instead of the existing mere offerings of further options for increased debt burdens. Initiatives such as microcredit schemes and loan deferments will not do much to help law firms in the long run.
“It is unreasonable to expect law firms to take on such debts without the necessary sustainable income,” Salim said in a statement today.
He suggested the government to provide interest-free grants and special funds for law firms and persuade Bank Negara Malaysia, as well as financial institutions, to waive or reduce interest rates on loans, for the relevant duration of the loan deferments.
The government was also urged to consider subsidising 50 to 80 per cent of law firm staff salaries.
Salim said due to the MCO period continuing to affect the cash flow of law firms, the Malaysian Bar called on the government to either provide for an extension on the submission and payment income tax beyond 30 April 2020, or to do tax instalment payments (CP500) for the year 2020, instead of the option for deferment offered as part of the Prihatin package.
“The Malaysian Bar Council notes that the Prihatin package makes provision for the deferral of payments, and the restructuring and rescheduling of employer contributions. However, the Malaysian bar also calls on the government to look into reducing the allocated percentage of employer contribution to the Employees’ Provident Fund (EPF).
“A balance must be structured between providing the business owners as well as employees, in protecting and defending the economy from a crisis,” he said.
He added that the Bar Council, with its own limitations, was trying to reach out to its members with assistance in any way possible during this daunting period.
On related issue, Salim urged the government to support small and medium enterprises (SMEs), which include law firms, as they form the lifeblood of the country’s economy.
“It must be emphasised that the purpose of an economic stimulus package is to stimulate an economy that is severely strained.
“It is not about bailing out business but about helping out people that rely on the business. The government must do so by assisting law firms in maintaining sustainable businesses through creating opportunity and providing incentives.
“Such support for law firms will spur a revival of the economy, through the revitalisation of other business operations and sectors that rely on legal services.”
Salim said the nationwide MCO imposed from March 18 to April 14, with the aim of curbing the spread of Covid-19, has impacted national commerce and the economic feasibility of SMEs across the board.
“These include the majority of the law firms in Malaysia. The imposition of the MCO on the nation has also led to potentially ruinous consequences on the economy. In light of this, the government announced a stimulus package, the Prihatin Rakyat Economic Stimulus package, reportedly worth RM250 billion, set to benefit everyone.
“However, upon examination, it appears that the Prihatin Package might only be beneficial for B40 citizens, and also for a silver of the M40 group,” added Salim. — DayakDaily
