Knight Frank urges relief measures to target all businesses and not just SMEs

Knight Frank Malaysia has raised concerns that the government should focus on the survival of all affected businesses, not only SMEs.

Sarkunan Subramaniam, Managing Director of Knight Frank, pointed out that SMEs have a strict definition by SME Corp Malaysia, and companies should check if they are eligible.

“The initiatives should be extended to all businesses that are badly affected during this economic slump and additional measures should be extended to the businesses involved in the hospitality, food and beverage, tourism and aviation sectors,” he added.

Sarkunan also stated that SMEs operating at premises owned by government-linked companies (GLCs) could enjoy rent exemption or discounts, although the quantum of discounts or rental exemption for these SMEs are unclear at this moment.

While Sarkunan applauds the Government’s direction of encouraging private property owners to provide at least 30 percent rental discounts to SMEs during the MCO and three months after it ends by granting these landlords equivalent tax deductions,he points out that this creates an issue for Landlords having to verify if their tenants are SMEs or not.

“It is better for this relief be extended to all businesses since the balance 60 percent contribution to the national economy is other than SMEs,” he said.

In the latest announcement by the Prime Minister, the allocation for the WSP has been increased by RM7.9 billion to RM13.8 billion and the Government has introduced a tiered WSP .

“However, whether the requirement for businesses to still demonstrate that they have a reduction in income of at least 50 percent was not further clarified. In fact, as the amount given is not significant comparatively, it is impractical to keep this requirement as by the time the companies can prove that they are making losses of at least 50 percent, they are already in a bad shape and may be closing down.

“The WSP initiative should not be restricted only to SMEs as well. It should be opened to all Malaysian companies. A fresh and clearer guideline is needed for this subsidy.” Sarkunan commented.

Sarkunan also urges State governments to consider a moratorium on quit rent and assessment for the second half of 2020, which is one of the quickest ways to reduce business cost.

“To cushion the economic hit caused by the COVID-19 pandemic, governments in other countries have rolled out supporting policies to shore up the confidence of businesses,” Sarkunan stated.

“The Singapore government announced property tax rebates of up to 100 per cent for non-residential properties for the tax payable this year while in Jiangsu province, China, the local government has introduced exemption of property tax and urban land use tax for industries severely affected by the epidemic in the first half of 2020. We wish the various State Governments could look into this closely and assist organisations in this unprecedented period.”

 

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