EPF Contributions Lowered to 7%, Extra RM100 BSH in Tun M’s RM20 Billion Stimulus Package

The Acting Prime Minister of Malaysia, Tun Mahathir Mohamad, has announced a special stimulus package worth RM20 billion meant to protect the economy of Malaysia from the economic effects of the Covid-19 coronavirus that has now spread all over the world. The package also represents an effort to spur the local economy by providing several benefits directly to the people, and outlines strategies to promote investment in green energy, among other things.

The stimulus represents the last work of former Finance Minister Lim Guan Eng before the dissolution of parliament, and can be broken down into three major components, those being:

Strategy I : Mitigating impact of COVID-19;
Strategy II : Spurring rakyat centric economic growth; and
Strategy III : Promoting quality investments

Under the first strategy, the government has announced several initiatives to help the tourism sector, including deferring monthly income tax payments from businesses in the tourism sector. Additionally, a 15% electricity discount will be extended to hotels, travel agencies, airlines, shopping malls, conventions and exhibitions centres. Hotels will also be given an exemption from the 6% service tax.

Under the second strategy, the minimum Employees Provident Fund (EPF) contribution by employees will be reduced by 4% from 11% to 7%, which the government estimates will free up RM10 billion worth of disposable income for regular Malaysians. That said, you can apply to opt-out of this scheme and maintain your previous rate!

A payment of RM200 to all Bantuan Sara Hidup (BSH) recipients scheduled for May 2020 will be brought forward to March 2020. An additional RM100 will be paid into the bank accounts of all BSH recipients in May 2020. An additional RM50 will be channelled to the public in the form of e-tunai!

Under the third strategy, the government has announced that Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC) will open bids for 1,400MW for solar power generation. It is estimated that the initiative will generate 25,000 new jobs. Malaysian Communications and Multimedia Commission will implement up to RM3 billion worth of works related to the National Fiberisation and Connectivity Plan.

Whew! There are a ton of other initiatives being rolled out, and you can read the rest in the full text of the stimulus package speech in this New Straits Times report.

Are you excited for this new stimulus package? Do you feel it does enough to help regular Malaysians? Let us know in the comments!

Also read: Budget 2020: Soon You Don’t Have to Pay Tolls During Non-Peak Hours for These 4 Major Highways!