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Timely relief for business fraternity

FMM In The News: THE STAR, PETALING JAYA, Tuesday, January 19, 2021 - At a time when the business community is still reeling from the impact of Covid-19 and the first movement control order (MCO) last year, the re-imposition of such restrictions since Jan 13 began worrying companies on their business continuity and sustainability.

Most of them got to breathe a sigh of relief yesterday when Prime Minister Tan Sri Muhyiddin Yassin announced the RM15bil “Perlindungan Ekonomi dan Rakyat Malaysia” (Permai) assistance package.

This was in line with the calls from various business associations and commerce groups for continued relief assistance for those that were affected by the pandemic.

Federation of Manufacturers Malaysia (FMM) president Tan Sri Soh Thian Lai said the extension of the wage subsidy was something the industry looked forward to although FMM would have hoped for the extension to be for a three-month period as there would be a cascading impact on business even after operations have resumed post-MCO.

“The FMM thanks the government for taking heed of its call to continue with the relief assistance, especially for industries that are not allowed to operate during MCO 2.0 which would certainly impact business continuity and sustainability and the livelihood of the rakyat, ” he said.

He said initiatives that would have a direct impact on the business sector include the relaxation of conditions for the Employment Insurance System, exemption of the Human Resources Development Fund (HRDF) levy, extension of the targeted loan moratorium and the restructuring of loan repayment.

Other measures include accelerating the implementation of microcredit schemes, a Shop Malaysia Online campaign, the enhancement of the Danajamin Prihatin Guarantee scheme and the expansion and extension of the special tax deduction for companies that provide reduction of rental on business premises.

On the extension of the effective period of the Temporary Measures for Reducing the Impact of Covid-19 Act 2020, Soh said the act is limited to only nine categories of contract, which excluded manufacturing and its related supplies.

“We request for the Act to be expanded to provide provision for relief for manufacturing and other manufacturing-related services such as trading or distributorship and logistics, given the contraction in manufacturing activities due to the harsh impact of the Covid-19 pandemic and the recent re-imposition of the MCO.

“As the current Act is very specific in providing temporary relief for contractual obligations faced during this pandemic period, FMM has proposed for a Disaster Management Act to be enacted which will account for other disasters including devastating floods or possible future outbreaks and not specific to Covid-19 only, ” he said.

SME Association of Malaysia president Datuk Michael Kang said Permai mainly extended some existing initiatives that were introduced under Prihatin and Penjana and improved on some areas.

“For example, the wage subsidy is extended to all employers operating in the MCO states for one month irrespective of sector and the extension of moratorium and restructuring of loan repayment by banks.

“They are not fantastic but still something for businesses. We just hope the government doesn’t extend MCO beyond one month, ” he said, adding that rental was a problem that many businesses were struggling with.

Kang said those in a more worrying situation were businesses that have not been allowed to operate since the first MCO such as tourism, pubs, children enrichment centres and some retail events.

He urged the government to look into ways to help companies in those fields or allow them to operate so they can start generating income.

Meanwhile, Malaysian Automotive Association president Datuk Aishah Ahmad (pic) said the sales tax exemption on cars will help boost vehicle sales in an already challenging economic environment.

“The extension on auto sales tax exemption would assist to spur auto industry sales in the first half of 2021. The auto industry players truly appreciate this government support, ” she said.

The vehicle sales tax exemption, which was supposed to end on Dec 31,2020, has been extended until June 30,2021.

The sales tax exemption percentage remains unchanged, with 100% for locally-assembled cars and 50% for fully-imported vehicles.

Year-to-date November 2020, total vehicle sales stood at 454,708 units, compared with 549,439 units in 2019.

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