Special Announcement on the Perlindungan Ekonomi & Rakyat Malaysia Assistance Package ("PERMAI Package")
On 18 January 2021, our honorable Prime Minister, Tan Sri Dato' Muhyiddin Yassin, unveiled the PERMAI Package worth RM15 billion. The PERMAI Package aims to improve on the existing on-going initiatives and also to accelerate the implementation of related initiatives.
The business initiatives include:
- The enhanced Wage Subsidy whereby employers operating in the Movement Control Order ("MCO") states will receive a wage subsidy of RM600 for each of their employees earning less than RM4,000 for a period of one month. This is coupled with an increase in the number of eligible employees per employer from 200 to 500 employees;
- The extension of the effective period of inability to perform contractual obligations under the Temporary Measures for Reducing the Impact of COVID-19 Act 2020 to 31 March 2021;
- Exemption of Human Resources Development Fund levy for companies that are unable to operate during the MCO and Conditional MCO periods; and
- Continuing electricity bill discounts for 6 business sectors, comprising hotel operators, theme parks, convention centres, shopping malls, local airline offices as well as travel and tour agencies.
Apart from the above non-tax measures, we also summarise below the highlights of the proposed key tax measures for your attention.
No. |
Current / Proposed Tax Incentives / Exemptions |
Extension of Coverage / Period / Effective Period under the PERMAI Package |
1. |
Special tax deduction for rental deduction of at least 30% on business premises rented to Small and Medium Enterprises ("SMEs") from April 2020 to March 2021 (subject to gazette of the relevant Rules). |
Extended to cover business premises rented to non-SMEs and to 30 June 2021 |
2. |
Special tax relief of up to RM2,500 for purchase of personal computer, smartphone or tablet incurred from 1 June 2020 to 31 December 2020. |
Extended to 31 December 2021 |
3. |
Tax relief of up to RM8,000 is given for medical expenses incurred for the treatment of serious diseases for taxpayer, spouse and children and the cost of fertility treatment (including full medical check-up of RM1,000 and prescribed vaccination of RM1,000). |
Tax relief for full medical check-up extended to cover Covid-19 screening |
4. |
Sales Tax exemption for purchase of passenger cars:-
from 15 June 2020 to 31 December 2020, subject to conditions. |
Extended to 30 June 2021 [previously announced via the Media Release issued by the Ministry of Finance ("MOF") on 29 December 2020] |
5. |
The condition of ownership to qualify for exemptions from Excise Duty and Sales Tax for the purpose of transfer, disposal and for private use of taxis is reduced from 7 years to 5 years. |
From 1 January 2021 to 31 December 2021 |
The Government has also taken the opportunity to highlight the incentives introduced in the previous packages particularly for donors who have been participating in initiatives to curb the spread of the COVID-19 pandemic. Incentives are given in the form of tax deductions on contributions and donations in cash or in-kind, as a recognition and appreciation of the noble efforts made. Donors are eligible for a tax deduction at their gross business income or aggregate income level, subject to meeting the prescribed conditions. Click here for our earlier Tax Whiz for more information.
The relevant speech can be accessed via the above link.
Should you have any questions or require further clarification, please do not hesitate to contact any of our Executive Directors, Directors, Associate Directors or Managers whom you are accustomed to dealing with or who are responsible for the tax affairs of your organisation.
Tai Lai Kok
Executive Director
Head of Tax
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Tai Lai Kok |
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