Malaysia’s Interim Prime Minister Tun Mahathir has announced a 2020 Economic Stimulus Package to mitigate the impact of the Covid-19 virus outbreak on our local tourism industry. Among the new initiatives announced include tax relief, additional cash aid and subsidies to promote spending for domestic tourism.
According to Tun Mahathir, Malaysians will get to enjoy a personal tax relief of up to RM1,000 for spending related to domestic tourism. In addition, each eligible Malaysian will also get RM100 digital vouchers for domestic tourism which can be utilised for domestic flights, rail and hotel accommodation. The government is allocating a budget of RM500 million for these vouchers and for matching grants for tourism promotion.
To encourage spending, the EPF contribution rate will be reduced from the current 11% to 7% from 1st April until 31st December 2020. The temporary EPF rate reduction is expected to unlock an additional RM10 billion worth of spending by Malaysians to help the local economy.
For Malaysians that are eligible to receive aid under Bantuan Sara Hidup (BSH), the government will be issuing RM200 payment in March, which is two months early from its original scheduled payout in May. On top of that, the government will also increase the cash aid by RM100 which will be credited to their registered bank account in May and an additional RM50 will be credited via eTunai Rakyat.
To assist tourism-related businesses, the government is deferring the monthly tax instalment payments and affected-businesses will be allowed to revise their profit estimates for 2020 with respect to the monthly income tax instalment payments without penalty. The government has also announced a 15% discount for electricity bills for hotels, travel agencies, airlines, shopping malls, conventions and exhibition centres. Hotels will also be exempted from the 6% service tax beginning March until August 2020.
