Micro funding schemes for SMEs, tax deduction for businesses

Tan Sri Muhyiddin Yassin

By Adrian Lim

KUCHING, June 5: The federal government is committed to assisting small and medium enterprises (SMEs) and businesses to alleviate their financial burden arising from the Covid-19 pandemic and the Movement Control Order (MCO).

Prime Minister Tan Sri Muhyiddin Yassin announced various allocations for the SMEs as well as tax incentives for businesses to jump start the country’s economy recovery during a live telecast today.

“To ease the cash flow for SMEs, SME Bank through the SME-GO scheme will provide funding for 16,000 eligible contractors under the G2 and G3 Grade that have obtained projects under the government’s comprehensive economic stimulus package.

“Due to the MCO which has disrupted business activities and cash flow issues, the federal government will provide tax incentives in various forms.

“Those include tax deductions for the purchase of personal protective equipment (PPE) for businesses operating during the new norm as well as tax deductions for medical fees for swab test (on workers).

“Besides, the federal government will provide penalty remission for late payment of tax and extend the period for the spending of renovation and enhancement of business premises.

“In addition, capital allowance will be accelerated and special tax deduction of 30 per cent for the reduction on rental premises will be extended,” Muhyiddin said during a live telecast over Radio Television Malaysia (RTM) today.

Muhyiddin disclosed that a micro funding scheme with an amount of RM400 million will be created with collaboration between Bank Simpanan Nasional (BSN) and TEKUN Nasional whereby RM50 million is allocated for women entrepreneurs.

As part of the effort the strengthen the involvement of Bumiputera in businesses and entrepreneurship, Muhyiddin who is Pagoh MP said a funding of RM200 million will be offered to Bumiputera entrepreneurs through Perbadanan Usahawan Nasional Bhd (PUNB).

Besides, he said RM300 million will be channelled to Majlis Amanah Rakyat (Mara) whereby Bumiputera entrepreneurs including those from the advanced skills institute could obtain the funding for working capital.

For the agriculture and food industry, Muhyiddin said the Agrofood Fund amounted to RM350 million will be provided to assist planters and miners in the mining and agriculture sectors.

To promote the commodity sector, the prime minister said the federal government has agreed to provide 100 per cent export duty exemption for palm oil and palm kernel which is processed between July 1, 2020 and December 31, 2020.

Besides, Muhyiddin revealed that tax incentive and employment insurance will be provided as part of the federal government’s call to encourage employers from the SMEs to require their employees to work from home.

Citing an example, he explained that employers who provide employees with mobile phone, laptop or tablet for their workers will be eligible for tax exemption up to RM5,000.

Muhyiddin added a few tax incentives were also introduced to assist 900,000 SMEs which were facing challenging times due to Covid-19.

He said to promote the establishment of new SMEs, the federal government has agreed to provide tax rebates up to RM20,000 yearly for three years.

Muhyiddin disclosed the tax rebate is given to new SMEs established and operational between July 1, 2020 and December 31, 2021.

Besides, he said the federal government has agreed to provide stamp duty exemption for SMEs which looks into merger and acquisition scheme to enhance their competitiveness.

He said the stamp duty exemption is for completed transactions between July 1, 2020 and June 30, 2021.—DayakDaily