MY govt's RM20bn stimulus package allots RM500m for domestic tourism

The Malaysian government has allocated RM500 million to provide all Malaysians with digital vouchers of up to RM100 per person for domestic flights, rails and hotel accommodations. Additional matching grants for tourism promotion will be provided. Interim PM Mahathir Mohamad said during a recent speech that the government will also relax existing guidelines limiting the use of hotels by government agencies to mitigate the reduced demand due to COVID-19.

This is part of Malaysia's RM20 billion 2020 Economic Stimulus Package recently announced to mitigate the impact of COVID-19. For a period of six months beginning April until September this year, the government has proposed to allow deferment of monthly income tax instalment payments for businesses in the tourism sector. In addition, companies affected by the COVID-19 to be allowed to revise their profit estimates for 2020 with respect to monthly income tax instalment payments without penalty.

Secondly, the government also proposed a 15% discount in monthly electricity bills to hotels, travel agencies, airlines, shopping malls, conventions and exhibitions centres. It will also exempt the 6% service tax for hotels. However, this exemption will be made effective earlier, that is from March to August 2020. Interim PM Mahathir said the government has also proposed to exempt Human Resource Development Fund levies for hotels and travel related companies.

The government has called on industry players to do their part in mitigating the impact of COVID-19, for example, having hotels offer discounts and shopping malls reduce rentals to tenants. Malaysia Airport Holdings will provide rebates on rental for premises at the airport as well as landing and parking charges.

Meanwhile, Bank Negara Malaysia (BNM) and Bank Simpanan Nasional (BSN) will both offer financing facilities for affected companies. BNM will provide a special relief facility worth RM2 billion, particularly in the form of working capital for SMEs at an interest rate of 3.75%. BSN will allocate RM200 million in microcredit facility offering an interest rate of 4% to affected businesses. In addition, the approval process for existing loan funds will be further streamlined such as Bank Pembangunan’s Tourism Infrastructure Fund of RM1.5 billion.

For individuals affected by COVID-19, a one-off payment of RM600 each will be given to taxi drivers, tourist bus drivers, tourist guides and registered trishaw drivers. As a sign of appreciation to those in the front line protecting Malaysia from the contagion, interim PM Mahathir said government staff directly involved in the containment efforts will be eligible for a special monthly critical allowance of RM400 for medical doctors and other medical personnel, as well as RM200 for immigration and related front line staff commencing February 2020 until the end of pandemic.

To date, the Ministry of Health has committed RM150 million to purchase the relevant equipment, medicine and consumables in the effort to contain COVID-19 outbreak. The government will provide the necessary resources to ensure COVID-19 disease is well managed.

Meanwhile, the government will provide up to RM100 million on a matching grant basis to HRDF to fund an additional 40,000 employees from the tourism and other affected sectors. It will also provide double deduction on expenses incurred on approved tourism-related training. Additionally, RM50 million will be allocated to subsidise short courses in digital skills and highly skilled courses. This incentive is expected to benefit 100,000 Malaysians, the interim PM said.  The stimulus package is anchored on three strategies - mitigating the impact of COVID-19, spurring rakyat-centric economic growth, and promoting quality investments.

According to a situation report released by the World Health Organisation on 27 February, Malaysia has 22 confirmed cases of COVID-19. However, multiple media reports including Channel NewsAsia, The Star and the New Straits Times just recently reported a 23rd case. Separately across the causeway, the Singapore government has allocated approximately RM2.4 billion to support the efforts to fight and contain the COVID-19 outbreak. The announcement came during the recent Budget 2020, which also introduced two special packages to help workers and enterprises weather near-term economic uncertainties, as well as support households during this period.