By Peter Sibon
KUCHING, Mar 28: To ensure that employers would be able to have a sustainable cash flow to pay their workers in the months to come due to the Covid-19 pandemic, the government needs to assist small and medium industries (SMIs) by providing them with tax reliefs in the next six months, said president of the Federation of the Chinese Associations of Sarawak Datuk Richard Wee.
He said since the banks will be giving moratorium for the next six months, Wee suggested that the government should also consider giving a six-month moratorium on the payment of Employees’ Providence Fund (EPF), Social Security Organisation (Socso) and all government-related monthly contributions by the employers.
“At this point of time, we need a steady cash flow for businesses to stay afloat. So, we hope that the government will assist the SMIs by exempting these extra overheads which will put a lot of pressure on the employers,” Wee told DayakDaily today.
Wee also urged the government to emulate other countries which subsidised SMIs in order to pay their employees.
“Singapore is subsidising 75 per cent and the United Kingdom is 80 per cent. The government can subsidisee up to 60 or 70 per cent for employees whose salaries are below RM5,000,” he said.
Additionally, Wee also hoped that insurance companies would provide six months’ moratorium on premiums to ease the burden of policyholders.
Wee’s view was supported by prominent lawyer and businessman Shankar Ram Asnani, who welcomed the stimulus package as announced by Prime Minister Tan Sri Muhyiddin Yassin yesterday as it would help the B40 and M40 groups.
“However, the SMIs including professionals stand to suffer the full brunt of Covid-19 without relief. The stimulus package for SMIs focused on loans and credit only such as Specific Relief Facility, Biz- Mula-I and Biz-Wanita-I.
“How does it make sense that businesses have to take loans to pay salaries and to pay their taxes? How about tax reliefs for a certain duration or tax exemptions from the government to churn the economy? The stimulus package is silent on the tax reliefs and tax exemptions,” he said.
Shankar questioned why businesses would take loans to pay overheads and salaries when they could not operate and generate income.
“Employers are already burdened with the basic operational costs, compliance with Employment/Labour Law and Paying Taxes CP500. As a result many SMIs will close down and many employees will lose their jobs,” he said.
He reiterated that the stimulus package for B40 and M40 was a temporary measure and the government should seriously look for firm ways to stimulate the economy as that was the only way to boost the economy.
Shankar said Malaysia must try to emulate other countries such as China, Japan, New Zealand, Hong Kong, Australia and Singapore which planned to implement corporate tax refunds for companies that have been forced to incur losses due to the outbreak of Covid-19.—DayakDaily
