Tax deduction, incentives for businesses impacted by Covid-19

June 5, 2020

KUALA LUMPUR: The government will provide incentives in the form of tax deduction for businesses affected by the implementation of the Movement Control Order (MCO).

Prime Minister Tan Sri Muhyiddin Yassin said the incentives are for businesses which have taken on an increase in operational costs from purchasing personal protective equipment (PPE) and Covid-19 screening tests.

To spur the set-up of new businesses and transactions, financial relief will be provided such as mergers and acquisitions (M&A), said Muhyiddin.

In his live televised address, Muhyiddin said, firstly the government, under the Economic Recovery Plan or Penjana, has agreed to provide income tax rebate up to RM20,000 per year for three assessment years for newly established small and medium enterprises (SMEs) between July 1, 2020 and Dec 31, 2021.

"Secondly, to encourage SMEs to be more competitive in doing business through M&A schemes, the government has agreed to provide stamp duty exemption for SMEs on any instruments executed for M&As, for the period between July 1 2020 and June 30, 2021," he added.

Meanwhile, to appreciate the contribution made by social enterprises, Muhyiddin said the government also allocated RM10 million in matching grant under the Malaysian Global Innovation and Creativity Center (MaGIC).

The matching grant can be applied by social enterprises, which have successfully contributed to conduct social projects to resolve issues beleaguering the targeted communities through innovative approach.