Top News Malaysia announces US$4.8b stimulus, no more blanket MCO By S Puvaneswary / Posted on 18 March, 2021 16:54 Malaysia’s prime minister, Muhyiddin Yassin, has unveiled a fresh RM20 billion (US$4.8 billion) economic stimulus package – one year after the country imposed its first lockdown in response to the Covid-19 pandemic. This is the sixth package to be rolled out to tackle the pandemic fallout. Dubbed The People and Strategic Empowerment Programme (or ‘Pemerkasa’ for short), the RM20 billion package will include targeted assistance to the tourism sector which has been deeply impacted by lockdowns and travel restrictions imposed to stem the Covid-19 spread. More financial aid given to Malaysia’s tourism industry in new economic stimulus package announced To support the recovery of the tourism industry, the government will extend tourism tax and service tax exemptions on accommodation provided by hotel operators until year-end. Tourism companies can also defer their monthly income tax instalment from April 1 to December 31. Muhyiddin said the tourism sector will also be provided entertainment duty exemption on admission fees to entertainment venues, including theme parks, sporting events and competitions. The government will also give a one-off special assistance grant of RM3,000 to tourism businesses registered with the Ministry of Tourism, Arts and Culture Malaysia. Further, the scope of special relief on individual income tax of up to RM1,000 will be expanded to include expenses on travel packages purchased from travel agents registered under the Tourism, Arts and Culture Ministry. To assist cash flow and reduce operating costs for hotels and theme park operators, convention centres, shopping malls, local airline offices and travel and tour agencies, a special 10 per cent discount on electricity bills will be further extended by three months until June 30. The wage subsidy programme for the tourism industry has also been extended for another three months up to end of June. Muhyiddin also said the government will no longer impose a blanket movement control order (MCO) which restricts travel movements across the country. Instead, the government will implement a more targeted Covid-19 containment strategy backed by science and data to reduce the negative impact on the country’s economy. The government has also beefed up its budget for the national Covid-19 immunisation programme from RM3 billion to RM5 billion to achieve herd immunity by December, rather than the initial target of 1Q2022. While some travel trade organisations have welcomed the various stimulus initiatives, especially the easing of travel restrictions, others have bemoaned the inadequate funding for the tourism and hospitality sector. Lauding the government’s announcement that no more blanket MCO will be imposed, KL Tan, president of the Malaysian Association of Tour and Travel Agents (MATTA), said: “MATTA has long been advocating the application of an analytical risk-based approach based on scientific data towards managing people’s movements as opposed to blanket travel restrictions. This is a positive step forward to rejuvenating domestic travel. “The industry is also looking forward to the managed reopening of international borders now that the vaccine rollout is underway.” Malaysian Association of Hotels president, N Subramaniam, hoped the government will consider giving higher subsidies to the tourism sector. He said: “The extension of the 10 per cent discount on electricity bills until June is insignificant, especially at times when hotels are operating at low occupancy rates.” Agreeing, the Malaysian Budget & Business Hotel Association national deputy president, Sri Ganesh Michiel, opined that the initiatives offered little help to the struggling tourism and hospitality industry. He proposed that efforts undertaken by the federal government should also be followed by all state governments and all government agencies that can provide assistance to the tourism and hospitality industry, as this will help to revitalise the hard-hit sector.