On 18 January 2021, the Prime Minister of Malaysia, Tan Sri Muhyiddin Yassin, announced the Perlindungan Ekonomi & Rakyat Malaysia (PERMAI) Assistance Package ('PERMAI'). PERMAI, which is valued at RM15 billion, is the fifth economic stimulus package introduced by the Malaysian Government since the outbreak of the Covid-19 pandemic in Malaysia.

Objectives of PERMAI

PERMAI consists of three objectives, namely:

  • First Objective - Combating the Covid-19 outbreak
  • Second Objective - Safeguarding the Rakyat's Welfare
  • Third Objective - Supporting Business Continuity

The First Objective - Combating the Covid-19 outbreak

The first objective consists of four initiatives that directly relate to healthcare matters, namely:

  1. An outline of the Covid-19 vaccination programme to be implemented by the Government, for which a sum of RM3 billion has been allocated;
  1. Strengthening the National Healthcare Sector through the recruitment of an additional 3,500 healthcare personnel;
  1. Enhancing cooperation between the public and private healthcare sectors to alleviate the strain on the public healthcare system; and
  1. Stepping up the testing of employees.

The Second Objective - Safeguarding the Rakyat's Welfare

The second objective consists of eight initiatives that seek to safeguard the people's welfare, especially the vulnerable groups and informal workers. A summary of these measures is as follows:

  1. Accelerating the release of payments under the Bantuan Prihatin Rakyat (BPR) programme to households earning up to RM5,000 per month and single individuals earning up to RM2,000 per month;
  1. Strengthening welfare programmes with the introduction of a Food Basket Programme and the allocation by the Government of RM25 million by way of a matching grant under the GLIC/GLC Disaster Relief Network programme for social initiatives; in addition, tax deductions will be granted to donors who assist those impacted by the Covid-19 pandemic based on their gross business income or aggregate income;
  1. Continuation of the moratorium and loan instalment reduction by financial institutions;
  1. The Employees' Provident Fund (EPF) will provide an advance of up to RM1,000 from the amount applied under the i-Sinar Category 2 facility, and the withdrawal process has been simplified;
  1. Extending the Special Tax Relief of up to RM2,500 on the purchase of mobile phones, computers and tablets which had expired on 31 December 2020 to 31 December 2021;
  1. Extending the provision of 1.0 GB data for internet access without charge to the public until 30 April 2021;
  1. Extension of the 6% sales tax exemption on passenger vehicles which had expired on 31 December 2020 to 30 June 2021;1  and
  1. A three-month extension of the moratorium of loan repayment for borrowers under the Perbadanan Tabung Pendidikan Tinggi Nasional2 (PTPTN) programme who have been affected by the Covid-19 pandemic or floods.

The Third Objective – Supporting Business Continuity

This objective comprises 10 measures which may be summarised as follows:

  1. Enhancing the Wage Subsidy Programme 3.0 whereby all employers operating in the states under a movement control order ('MCO states'), regardless of sectors, will be eligible to apply for a one-month wage subsidy of RM600 for each employee earning less than RM4,000 up to a limit of 500 employees;3
  1. Extending the Prihatin Special Grant Plus (previously applicable only for traders and hawkers in Sabah) to Small and Medium Enterprises ('SMEs') whereby the SMEs in the seven MCO states will receive a payment of RM1,000 each and the SMEs in the other states will receive a payment of RM500 each;
  1. A one-off financial assistance of RM500 will be provided to tourist guides, drivers of taxis, school buses, tour buses, rental cars and e-hailing vehicles;
  1. Accelerating the implementation of microcredit schemes (including RM1.0 billion in soft loans by Bank Simpanan Nasional, Agrobank and TEKUN4) that have been announced previously;
  1. Accelerating the implementation of the SME and Micro SME e-Commerce Campaign and Shop Malaysia Online Campaign;
  1. Enhancing the existing Danajamin PRIHATIN Guarantee Scheme amounting to RM50 billion in the following ways:
  1. Increasing the maximum financing from RM500 million to RM1.0 billion;
  1. Expanding the scope of financing to cover working capital with a guarantee period of up to 10 years; and
  1. Allowing foreign-owned companies to participate in the scheme provided that Malaysian employees account for at least 75% of the workforce of such companies.
  1. The special tax deduction for landlords who reduce rent by at least 30% from the original rent for business premises rented to SMEs will be enhanced in the following ways:
  1. The special tax deduction will be expanded to include rent reduction granted to non-SMEs; and
  1. The special deduction period which commenced from 1 April 2020 will be expanded by extending the expiry date from 31 March 2021 to 30 June 2021.
  1. The following measures will apply in relation to discounts on electricity bills:
  1. The Government will provide a special discount of 10% on electricity bills from January to March 2021 to six business sectors, namely hotel operators, theme parks, convention centres, shopping malls, local airline offices and tour and travel agencies; and
  1. The rebate given by Tenaga Nasional Berhad to all account holders will continue until 30 June 2021.
  1. A Bus and Taxi Hire Purchase Rehabilitation Scheme will be introduced by Syarikat Jaminan Pembiayaan Perniagaan whereby a 50% guarantee on financing from hire purchase and leasing companies will be provided for selected buses (such as sightseeing buses) and taxis, to enable eligible bus and taxi operators to have a 12-month moratorium and lower monthly repayments. A guarantee of RM1 billion will be provided for this; and
  1. Extension of the operation of Part II of the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Act 2020 (which, among others, precludes a party from exercising his contractual rights against a party who is unable to perform its contractual obligations arising from any of the categories of contracts specified in the Schedule to the said Part II of the Act) to 31 March 20215.

Source of Funding

To fund the RM15 billion required for PERMAI, the Government will re-allocate existing funds passed on current priorities and through more prudent spending.6

Expediency in Implementation

The Government has also pledged to implement the initiatives under PERMAI expediently and effectively.7

The full text of the Prime Minister's speech on PERMAI is available here.


1 This initiative has been previously announced.

2 Perbadanan Tabung Pendidikan Tinggi Nasional is the National Higher Education Fund Corporation.

3 This initiative includes two other measures, namely (i) the provision of financial assistance under the Employment Insurance System to employees who have lost their jobs or whose contracts were not extended after having been renewed for at least times previously; and (ii) an allocation by the Government of RM24.0 million to fund the full contribution under the Self-Employment Social Security Scheme for delivery riders.

4 TEKUN is the acronym for Tabung Ekonomi Kumpulan Usahawan Niaga, that is the National Entrepreneur Group Economic Fund, an entrepreneur development and micro financing institution whose main objective is to enhance bumiputera participation in business and entrepreneurship.

5 This initiative has been previously announced. The categories of scheduled contracts have also been expanded. For further details please click here.

6 Paragraph 59 of the Prime Minister's speech on PERMAI.

7 Paragraph 59 of the Prime Minister's speech on PERMAI.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.