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Economic relief: ASPAC

COVID-19: Economic Stimulus in ASPAC

Economic relief: ASPAC

Dominic Pelligana | Partner,

China has implemented a vast array of economic relief measures in the fight against the human and business impact of COVID-19. (Please visit our blog posting Economic relief: China for highlights of China’s economic response.) Other countries and territories across Asia-Pacific have introduced an equally striking and innovative assortment of initiatives to assist private companies in protecting the value of their businesses.

At the time of writing, the following examples of business-relief programs were being introduced in various countries across Asia.

Australia1

The Federal Government has implemented a range of economic and business-continuity measures that support private companies’ financial requirements and ensure that people remain employed, committing in excess of AUD66 billion.

Not-for-profits and small businesses with a turnover under AUD50 million will receive a tax-free cash payment of up to AUD100,000, with a minimum payment of AUD20,000 for eligible companies.

The Federal Government is also offering to guarantee unsecured loans of up to AUD250,000 for up to 3 years.

Tax incentives are available to assist private companies in managing their cash flow, and additional tax deductions have been introduced for new investments. Companies will be allowed to defer at least 4 months of business tax payments; businesses that report quarterly gross Goods and Services Tax payments can opt in to a monthly reporting schedule in order to accelerate their GST refunds.2

Japan3

The Tokyo tax authorities announced that business taxes due between 27 February 2020 and 15 April 2020 will be extended to 16 April 2020, with the exception of businesses that were closed in mid-year.

Small and medium-sized business loan programs totaling close to $20 billion have been introduced. Productivity subsidies are being provided for initiatives that lead to efficiency improvements, such as IT tools in back-office operations. The potential subsidy amounts range between 300,000 and 4.5 million yen.

Financial support is also available to companies that have experienced year-over-year sales declines that range between 5 percent and 20 percent. Loan guarantees ranging between 80 percent and 100 percent of the borrowed amount may be provided in these instances.

Malaysia4

In Malaysia, various measures have been introduced to reduce the strain on cash-flow on the hardest-hit businesses in certain sectors, particularly those related to tourism. This includes a 6-month deferral of tax-instalment payments, exemption from the Human Resource Development Fund levy, and a service-tax exemption for hotels.

A RM2 billion special relief facility at 3.75 percent interest has been made available to small- and medium-sized enterprises, and banks have been asked to be flexible on loan restructuring or rescheduling requests. 

Tax incentives are being provided as well, including accelerated capital allowances for machinery and equipment; tax deductions for commercial renovations and refurbishments; and import duty and sales tax deductions on port operations equipment.

New Zealand5

Wage subsidies totaling NZD5.1 billion are being provided to businesses experiencing significant sales declines in order to relieve pressures on their cash flow. Immediate relief is also available through tax-filing deferrals and the removal of penalties. A special aviation support package has been introduced to ensure the continuity of air cargo routes.

NZD10 million has been directed to Tourism New Zealand to diversify its marketing portfolio to attract tourists from other countries following travel declines from China.

Philippines6

The P28 billion stimulus package is focused on supporting the tourism industry and related supply chains, including hotels, restaurants, land transport, logistics, and catering.

Singapore7

Singapore’s relief programs are designed to support the continuity of business enterprises and the continuous employment of workers. This includes a jobs support scheme to assist companies in retaining local workers and enhancements to the wage credit scheme, which supports enterprise transformation efforts by sharing productivity gains with employees.

A 25 percent corporate income tax rebate of up to SGD15,000 is included in the measures as well as a doubling of the working capital loan component of the government’s Enterprise Financial Scheme, which will assist companies in more easily accessing working capital. A 15 percent property tax rebate will also be granted to qualifying commercial properties.

Companies in the tourism sector can access a temporary bridging loan for additional cash-flow support.

South Korea8

VAT exemptions are available to businesses earning less than KRW60 million per year. In addition, special financial support for small and medium-sized businesses has increased, and business property taxes are being reduced by 50 percent.

We at KPMG Private Enterprise understand the potential consequences of the current global health situation for private companies. We recognize that new economic relief programs are being introduced regularly and encourage you to follow our regular blog series for the latest information. Please reach out to KPMG Private Enterprise advisers in your country or territory for their guidance.

Check out our guide to robust business continuity planning entitled “Leading successfully in turbulent times” (PDF 670 KB) and our business overview and action checklist entitled “Understanding the implications of COVID-19 for private companies” (PDF 382 KB).