Summaries about PENJANA incentives -

Wage Subsidy Program (Mid of June - End of September)

  1. The wage subsidy program will be extended for a further three months with a subsidy of RM600 per employee for all eligible employers.
  2. The current wage subsidy program will also be enhanced as follows:
  • Allow employers receiving wage subsidy to implement reduced work week (e.g. 4-day work week with a reduced pay of 20%).
  • Allow employers to receive wage subsidy for employees on unpaid leave, subject to employees receiving the subsidy directly (only applicable for tourism sector and businesses which are prohibited from operating during CMCO)

Hire and Train

The Government will introduce incentives to encourage the hiring of the unemployed as follows:

Youth -

  • RM600 per month for apprenticeships for school leavers and graduates for up to 6 months.

Unemployed Workers -

  • Below 40 years old: RM 800 per month for employment of unemployed for up to 6 months.
  • 40 years old and above or persons with disability: RM 1,000 per month for employment of unemployed for up to 6 months.
  • Training allowance of RM4,000 per individual will also be extended to those retrenched but not covered under the Employment Insurance System (EIS).

Gig Economy Protection

The Government will facilitate policies to support the growth of the gig economy and the welfare of gig economy workers through:

  1. A matching grant of up to RM50 million for gig economy platforms who contribute for their gig workers towards PERKESO’s employment injury scheme of up to RM162 and EPF’s i-Saraan contribution of up to RM250 yearly.
  2. Provide MDEC with RM25 million for the Global Online Workforce (GLOW) program which will train Malaysians to earn income from serving international clients while working online from home.

Flexible Work Incentives

To sustain the new normal of work-from-home, the Government will support employers and employees with the following:

  1. Further tax deduction for employers which implement Flexible Work Arrangements (FWAs) or undertake enhancement of their existing FWAs (effective 1st July 2020).
  2. Individual income tax exemption of up to RM5,000 to employees who receive a handphone, notebook & tablet from their employer (effective 1st July 2020).
  3. Special individual income tax relief of up to RM2,500 on the purchase of handphone, notebook & tablet (effective 1st June 2020) With the increasing number of Malaysians working from home, SOCSO will also provide.
  4. Coverage for workers involved in accidents while working at home under the Employment Injury Scheme.

Child Care Subsidy

To ease the transition to the new normal of working-from-home, the Government will support working parents through the subsidy of child care expenses:

  1. eVouchers of RM 800 per household for mobile childcare services, to be utilized from now till end of August 2020
  2. Increase in income tax relief for parents on childcare services expenses, from RM 2,000 to RM 3,000 for Year of Assessment (YA) 2020 and 2021.
  3. There will also be incentives to encourage child care centres to comply with the new normal and to incentive certification of early education practitioners:
  • One-off grant of up to RM5,000 per childcare center registered with the Ministry of Women, Family and Community Development (up to 31st December 2020) to comply with new healthcare SOPs.
  • Incentive to train new practitioners for child nursing and early education course under Ministry of Women, Family and Community Development.

Digital Transformation

The Government will continue to provide grants and loans to eligible enterprises for adoption or subscription of digitalisation services under the following programs:

  1. SME Digitalisation Matching Grant totaling of RM100 million, in partnership with telecommunication companies.
  2. SME Technology Transformation Fund totaling of RM500 million loan (application opens from July 2020).
  3. Smart Automation Grant totaling of RM100 million, capped at up to RM1 million per company.

Penjana SME Financing

Additional financing facility to eligible SMEs:

The banking sector will offer an additional RM2 billions of funding to assist SMEs adversely impacted by COVID-19 sustain business operations at a concession rate of 3.5%. This financing facility, with an emphasis to finance new SME customers to Banks, will be made available in mid-June 2020 with a maximum loan size of RM500,000 per SME.

PENJANA Tourism Financing

Provision of funding facility for the tourism sector:

To aid the tourism sector, a RM1 billion PENJANA Tourism Financing (PTF) facility will be made available to finance transformation initiatives by SMEs in the tourism sector to enable them to remain viable and competitive in the new normal. Details of this fund will be announced in July 2020.

PENJANA Micro-financing

Dedicated funding support for micro enterprises via:

  1. New funding program for SMEs and micro enterprises at an interest rate of 3.5%.
  2. Aggregated approved financing will be capped at RM50,000 per enterprise.
  3. RM50 million is earmarked for women entrepreneurs.

Tax Relief COVID-19 Expenses

Extend the period and expand the scope of expenses allowed as tax deduction or capital allowance for COVID-19’s prevention, including:

  1. Covid-19 testing
  2. Purchase of PPE and thermal scanners

Financial Stress Support

Ease financial stress of business through:

  1. 50% remission of penalty for late payment of sales tax & service tax due and payable from 1st July 2020 to 30th September 2020.
  2. Extension of special tax deduction for renovation and refurbishment of business premises to 31st December 2021.
  3. Extension of Accelerated Capital Allowance on eligible capital expenses including ICT equipment to 31st December 2021.
  4. Extension of special deduction equivalent to 30% reduction in rental for SMEs to 30th September 2020.

Start-up Incentives

To catalyze establishment of new businesses, financial relief will be provided in the form of:

  1. Income tax rebate up to RM20,000 per year for 3 years of assessment for newly established SME between 1st July 2020 to 31st December 2021.
  2. Stamp duty exemption for SMEs on any instruments executed for Mergers and Acquisitions (M&As), for period between 1st July 2020 to 30th June 2021.

Hope above summary helps you!

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2020 SME Digitalization Grant FAQ
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