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Extend Salary Subsidy Program To All Employers - KLSICCI

Photo by Thijs van der Weide from Pexels

KUALA LUMPUR 28 March 2020 - Kuala Lumpur & Selangor Indian Chamber of Commerce & Industry (KLSICCI) believed that all small and medium enterprises (SMEs) should be eligible for the salary subsidy program implemented by the government to help businesses to ease their burden during the Movement Control Order period.

KLSICCI President, Datuk R Ramanthan said, all employers should qualify for this subsidy as long as the employees are legitimately in their payroll. 

His full statement is as follows:

We are thankful for our beloved Prime Minister YAB Tan Sri Muhyiddin Yassin for the rejuvenating and mammoth RM 250 billion stimulus package. 

We understand the challenges faced by the government politically, economically and the acute health crisis now.

Nevertheless, we Malaysians are confident that we will overcome this crisis under our PM’s leadership.

The SMEs & SMIs are greatly impacted as a result of the enforcement of movement control order (MCO). 

The business fraternity was eagerly yearning for a compassionate and relieving stimulus package from the Government to cushion the business losses currently and in coming months to go. 

Unfortunately, the announced stimulus package did not cater to significant and immediate liquidity
into the economy for the SMEs and SMIs. 

It is a fact that SMEs contribute 38% to the country’s gross domestic product(GDP), however utmost priority was not given to them in this stimulus package.

Hence, we would like to emphasize and reaffirm to the government that we need more assistance to survive the COVID-19 onslaught. 

This is because the corporate sectors will be planning to opt for retrenchment and belt-tightening measures once the MCO ends in mid-April or in mid-May if it is extended further. 

Many corporate companies are already reviewing their procurement contracts and hinting that cost-cutting efforts are already in the fray. 

SMEs are going to be in a lurch if real pre-emptive measures are not taken by the government to safeguard and protect the local SMEs that have been loyally contributing to the country’s GDP in the past few decades.

Malaysian Institute of Economic Research (MIER) predicts that 2.4 million jobs would be lost in a couple of months. 

Losses of jobs are significantly due to companies closing down their businesses due to the fear of going bankrupt.

Government’s unfair and unjust decision to enforce the employers to pay their employees' salaries and fixed allowances also add the trouble for the SMEs. Full brunt is on the employers. 

The “Program Subsidi Upah” (RM 600 subsidy) should be implemented across SMEs without any subjective conditions. 

All the employers should qualify for this subsidy as long as the employees are legitimately in their
payroll. 

We request the Government to be less stringent on the conditions and increase the subsidy to at least minimum RM 1,000 monthly for the duration of at least 1 year period.

Apart from the above recommendations, we would like to request the Government to review into following :

• To reduce the Corporate Tax of SMEs.
• To reduce the foreign workers' levy renewal payment.
• To suspend or waive the Employer’s EPF contribution(13%) for 6 months period.
• To further reduce the TNB tariffs for commercial and industrial.

We would like to humbly and seriously request the government to moot the effort taken by other large economies like the USA, UK , Singapore and India to safeguard and protect the local SMEs and SMIs so that the contributor of one third country GDP does not fade away along with COVID-19.

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