Prihatin is timely measure for extraordinary times - Deloitte Malaysia
27 March 2020 | The Edge
KUALA LUMPUR (March 27): The country is navigating uncharted waters and the Prihatin Rakyat Economic Stimulus Package (PRIHATIN) is a timely measure for extraordinary times, said Deloitte Malaysia.
The consultancy’s country tax leader, Sim Kwang Gek, said the allocated RM250 billion is more than three times the RM67 billion allocated for stimulus packages during the 2009 financial crisis.
“This demonstrates the commitment of the government in prioritising the well-being of the rakyat while also ensuring the survival of businesses impacted by COVID-19,” she told Bernama here today.
On a programme to allow employers to defer, restructure or reschedule their mandatory Employees Provident Fund contributions for employees, she said this is expected to generate cash flow savings of RM10 billion.
“This proposal is certainly more palatable (than simply reducing workers’ EPF contribution) and is a welcome move as it alleviates cash flow constraints while also ensuring retirement savings are not significantly impacted,” said Sim.
Touching on the deferment of tax instalment payments for small and medium enterprises (SMEs), she said this proposal would assist them in managing their cash flows.
However, she said, the impact may not be significant as affected businesses are now allowed to revise their estimates of tax payable earlier.
For instance, in the third month of instalment and with this facility, most businesses would have revised their tax estimates downwards, she explained.
On the deferment and waiver of rental expenses initiative, Sim said this would ease the financial burden faced by families especially those in bottom 40 percent household income (B40) and middle 40 percent household income (M40) groups.
“The proposal to waive six months’ rental on properties owned by the Government is also a welcome move but more can be done to alleviate cash flow challenges faced by businesses,” she said.
A form of rental subsidy or rebate to businesses should be considered as rental cost is a significant part of their operating expenditure, she said.
27 March 2020