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FMM lauds additional RM10 billion allocation to help SMEs

FMM In The News: THE SUN DAILY, PETALING JAYA, Monday, April 6, 2020 -  The Federation of Malaysian Manufacturers (FMM) today welcomed the additional RM10 billion allocation to assist small and medium enterprises (SME), but reiterated two recommendations it had made previously to the government.

FMM noted that the RM7.9 billion allocation for the wage subsidy programme which now stands at RM13.8 billion, exceeded its initial appeal of RM12 billion. It estimated that the increase will help more SMEs and benefit 4.8 million workers.

“The additional wage subsidy would most definitely help to alleviate the wage cost burden for the SME employers for the next three months,” said FMM president Tan Sri Soh Thian Lai in a statement.

In addition, the limit for the wage subsidy for large companies has been increased to 200 from 100, previously.

“However, we had hoped that the condition on a 50% reduction in revenue in order to qualify for the wage subsidy would have been removed as well as the ceiling of RM4,000. We continue to appeal to the government to remove this condition in view that many companies, given the movement control order (MCO), have yet to finalise their financial accounts for March 2020,” he said,

In addition, Soh pointed out that the condition for employers to retain their workers for the next six months would be a challenge as there is currently a lot of uncertainty of the continued viability of businesses.

However, he welcomed the consideration accorded by the government to agree for negotiations between employers and employees on the terms of employment during the MCO, including cost cutting measures such as pay cuts and unpaid leave.

Soh took the opportunity to reiterate its recommendations that the waiver of interest during the moratorium period of six months be extended to include, trade facilities, overdraft and leasing.

Aside from that, he called for a further reduction in interest rates of the RM5 billion Special Relief Facility for SMEs to 2% from 3.5%, along with an easing of lending conditions including collateral requirements.

“Lastly, FMM requests the government to review the stimulus package from time to time to also assist large corporations as SMEs are dependent on them as part of the overall business ecosystem,” Soh said in the statement.

Earlier today, Prime Minister Tan Sri Muhyiddin Yassin announced the PRIHATIN Package for SMEs (Additional Measures) package, which comprised several initiatives.

These include abolishing the 2% interest rate for the RM500 million micro credit scheme under Bank Simpanan Nasional, the easy financing scheme for micro businesses being extended to TEKUN Nasional, and SME retailers being given either a discount or full exemption on rent payment for premises owned by government-linked companies

The government is also cutting the foreign worker levy payments by 25% for all companies with employees whose work permits end between April 1 and Dec 31, 2020.

The deadline for companies to submit financial statements has also been extended by three months from the last day of the MCO. This will apply to companies with financial years ending on Sept 30 to Dec 31, 2019.

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