RM600 should go to bosses, not staff already paid: LDP
Published on: Sunday, March 29, 2020
Datuk Chin Su Phin.
Kota Kinabalu: Liberal Democratic Party (LDP) President Datuk Chin Su Phin urged the Government to devise and implement more incentive-based measures to resuscitate business activities, especially Small and Medium Enterprises (SMEs) which account for over 80 percent of tax revenue and generate the most job opportunities across the country.He said Prime Minister Tan Sri Muhyiddin Yassin has announced the RM250 billion Prihatin Rakyat Economic Stimulus Package (Prihatin) which benefitted the middle and low-income groups.
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However, the stimulus package have not addressed the plight of employers, who were suffocating under the financial stress.
Chin said Prihatin aimed at alleviating the predicament faced by all business sectors, as well as aiding the people.
Of the total, about RM128 billion is allocated for safeguarding the people’s welfare, RM100 billion to support businesses including the SMEs and RM2 billion to strengthen the national economy.
He lauded the economic stimulus package for providing cash assistance for households and individuals, including civil servants, the self-employed group such as hawkers and drivers, as well as tertiary students. The government also provides incentives for frontline medical, police and military personnel until the novel coronavirus (Covid-19) pandemic is over.
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He said the both the medium and low-income groups would benefit from Prihatin.
“For instance, an e-hailing driver is entitled to receive a significant amount of assistance.”
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However, Chin said the government should devise and implement more incentive-based measures to resuscitate the business activities, especially SMEs which account for over 80pc of tax revenue and generate the most job opportunities across the country to achieve more lasting impact from the stimulus packages.
He said SMEs have suffered the most during the Movement Control Order (MCO) period.
He said SMEs still needed to maintain the minimum workforce during MCO, or else they would not be able to reassemble them when business resumed.
“They may still have a backlog of unpaid rentals, utility bills, assessments, rates, taxes and deadlines to meet, despite the complete stoppage of all sources of revenues.”
Chin added that SMEs were required to submit their tax assessment a year ahead to the Inland Revenue Board of Malaysia (LHDN) to be taxed in advance.
“SMEs also need to keep stocks and materials, some of which may be deteriorating or expiring.”
He said businesses in the food and beverage (F&B) sector such as coffee shops or bubble tea shops have purchased large volume of stock before the MCO, which would expire after a certain period, resulting in huge losses for the operators.
“We can expect customers to steer away from F&B outlets in the next four to five months, even after the Covid-19 pandemic has subsided.
“This means that eatery operators still have to sustain through the lull in business for quite some time.”
Hence, Chin said the one-off cash reliefs provided under the Prihatin Rakyat Economic Stimulus Package would not benefit SMEs as the Covid-19 rampage would have a long-term effect on businesses for at least six months or more.
He said the RM5.9 billion allocation for Wage Subsidy Programme, whereby RM600 will be channelled to each employee with a salary of less than RM4,000 per month for a period of three months and whose employers experienced a 50 percent drop income since January 1, was not an effective mechanism to reduce employers’ burden.
Instead, he said the RM600 wage subsidy should be directly channelled to employers unconditionally to alleviate the latter’s financial pressure.
“If the government truly wants to help employers, why not offer the wage subsidy unconditionally?
“Besides, how is the government supposed to determine if a company has experienced 50 percent drop in income for the past three months?”
Chin proposed to the government to consider implementing the following measures:-
Direct SME banks and other related agencies to extend easy credits to SMEs during this period. Temporarily remove all the hitherto stringent assessment requirements, such as zero debt records, three years business and tax payment records et cetera. Reduce documentary compilation and preparation for application.
Simplifying the application procedures.
Waiver of front end cash deposits and indemnity insurances requirements
Waiver of progress payments clawbacks.
Give longer moratorium for loan repayments debt servicing.
Granting tax holiday to small businesses with annual sales below RM200,000. Reduce income tax rate to 15 percent for SMEs with annual sales below RM500,000.Stay up-to-date by following Daily Express’s Telegram channel.
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