Govt moves to lighten three employer commitments to ease business cash flow

KUALA LUMPUR (March 27): Prime Minister Tan Sri Muhyiddin Yassin has announced measures that will lighten three commitments that employers face to address the cash flow constraint that is weighing on businesses that have been affected by the COVID-19 outbreak.

The first is the introduction of a programme that will allow employers to postpone, restructure, or reschedule their mandatory Employees Provident Fund contribution for employees. The EPF will introduce this programme on April 15.

This, Muhyiddin said, will provide an estimated RM10 billion in cash flow savings for employers, and benefit over 480,000 SMEs and other businesses. It is also expected to save over 8 million jobs.

The government is also going to exempt employers' contributions to the Human Resource Development Fund (HRDF) for six months from April 1 — for all sectors — that is estimated to provide a cash flow relief of RM440 million.

The income tax payment for all SMEs will also be postponed for three months starting April 1. This is an enhancement to a similar measure under the first stimulus package announcement, whereby the income tax payment will be deferred for six months for businesses in affected sectors like tourism.

“For other affected sectors, they are allowed to defer the income tax imposed on the third, sixth and ninth month during the business period,” said Muhyiddin.

The announcement was made as part of the federal government’s enhanced economic stimulus package announced today, where it added RM230 billion to the RM20 billion allocation announced in late February, to counter the pandemic's impact to the economy.

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