ACCCIM’s PRESS STATEMENT ON THE EXTENSION OF CMCO IN PENINSULAR MALAYSIA (EXCEPT PERLIS, PAHANG & KELANTAN), 9 NOVEMBER – 6 DECEMBER 2020
The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) views with concern about the impact of further extension of CMCO on the economy and businesses, especially the travel, tourism, hospital and retail sectors.
The ACCCIM’s recent quick-take survey indicated that more than 40% of respondents expect their revenue to drop by more than 20% in 4Q 2020 and 1Q 2021, with almost 48% of businesses operating in Selangor, Kuala Lumpur and Sabah expect their revenue to decline by between 21% and more than 50%. Our channel checks also indicated footfall in the shopping malls have collapsed to 15-30% from 80-90% previously while retail sales have declined sharply since the occurrence of a third wave of virus.
Tan Sri Datuk Ter Leong Yap, President of the ACCCIM reiterates that it is highly critical to ensure that the measures and initiatives as well as spending programs budgeted at RM322.5 billion or 20.6% of GDP in 2021, including RM69.0 billion of development expenditure are implemented quickly and effectively in getting businesses and industry back to a normal economic cycle. The planned public infrastructure projects and programs must be quick to implement effectively and feed through to the economy, households and businesses. Project implementation delay can stifle the economic recovery.
In follow-up to the National Budget 2021, our quick take survey indicates that 84% of total 486 respondents feel that the Budget measures do not help SMEs. 45% of businesses would face cash flow problems; 39% envisage sales/demand to drop and 19% citing lack of financing support or facing difficulty to get financing. The survey shows that loan moratorium, wage subsidy and utilities’ discount as well as financial support (loans, relaxation of terms and conditions etc) were listed as amongst the key measures needed to assist them through this extreme difficult time.
Tan Sri Datuk Ter says that the ACCCIM will continue to proactively engage with the Government and relevant Ministries to discuss the feedback and suggestions received.
With the further extension of CMCO almost nationwide, we are deeply concerned that businesses, especially SMEs would continue to struggle with cash flows, cost and credit problems. Hence, we hope that the Government can consider to provide continued support for businesses on 3Cs (Cash flow, Cost and Credit) to help them get back on feet firmly amid lingering uncertainty about the pace and strength of economic recovery as well as anxiety over an occurrence of a third wave of virus.
A. EASING 3Cs (CASH FLOW, COST AND CREDIT)
B. ENHANCEMENT OF LOAN FACILITIES AND GRANT
The 2021 Budget has provided a number of funds and financial facilities to assist SMEs and specific sectors, which amongst others include RM1.0 billion Investment Incentives Package for high value-added technology in supporting R&D investment in aerospace as well as electronic clusters; RM2.0 billion Targeted Assistance and Rehabilitation Facility (TRRF) under Bank Negara Malaysia, which offers a concessionary rate of up to 3.5% with guarantee coverage by Syarikat Jaminan Pembiayaan Perniagaan (SJPP) and Credit Guarantee Corporation (CGC); and RM500m to High Technology Fund by Bank Negara Malaysia (BNM) to support high technology and innovative companies. This is in addition to various loan schemes and grant for digitalisation and automation as well as tourism provided under PENJANA.
Tan Sri Datuk Ter urges the SMEs to apply for the various fiscal support funds and financial facilities to help them through this extreme difficult time. It is observed that some of the loan schemes under PENJANA with the exception of SRF (100% utilisation rate) have low utilisation rate. We propose to ease the access to loan facilities as well as enhance the terms and conditions.
C. REVIEW OF THE TAXATION POLICY FOR EASE COST OF DOING BUSINESS AND INVESTMENT
The 2021 Budget proposed that the existing tax incentives, due to end this year, will be extended until 2022, pending the study of tax incentives review. The extension includes tax incentives for maintenance, repair, overhaul (MRO) activities for aerospace, building and repair of ships, bio nexus status and economic corridor developments.
In the meanwhile, we propose to consider the following tax measures to ease businesses’ operating cash flow.
D. MALAYSIA MY SECOND HOME (MM2H) PROGRAM
The Budget 2021 and Penjana have rolled out measures to resuscitate the real estate sector, which has been in doldrum for many years. Faced with the persistent glut of unsold properties, we propose a review of Malaysia My Second Home (MM2H) program).
Malaysia My Second Home (MM2H) is a program that allows foreigners and their family to live in Malaysia on a long-stay visa for 10 years and is renewable by another 10 years, bringing the total to 20 years. This program not only to incentivize foreigners to live long-term in the country but also helps to promote our leisure and tourism sector. It is proposed that: