Accountants urged the Government to permit small- and medium-sized enterprises (SMEs) to defer income tax instalment payments up to December 2020 instead of a three-month period ending in June 2020.
The Malaysian Institute of Certified Public Accountants and Malaysian Rating Corporation Bhd said that several SMEs were facing bankruptcy as their cash flow and revenue ran out with overhead expenses accumulated with the movement control order. The Government could consider extending the deferment until December 2020 as the impact of supply chain disruptions would be felt even after the COVID-19 outbreak ends.
The Government permits all SMEs to postpone income tax instalment payments for a three-month period commencing 1 April 2020 under the Prihatin Rakyat Economic Stimulus Package. This measure is in addition to the tax instalment payment postponement provided to impacted businesses in the tourism sector for six months, also beginning from 1 April 2020.
The accountants said that it is essential for financial institutions, namely commercial banks and development financial institutions, to step forward at this critical moment in Malaysia’s economic history. It is necessary that they continue to introduce funds into the economy and support economic activities by lending to viable businesses.
Otherwise, Malaysia could end up with thousands of business failures which would have dire implications on the financial system, economy and labour market. The two organisations said that the surge in business failures could also trigger large-scale social problems.
Source: Free Malaysia Today