Highlights for Malaysia’s RM20 billion fiscal stimulus announced by Malaysia’s prime minister Tun Dr Mahathir to counter the Coronavirus risk and increase spending.

Malaysia’s Fiscal Stimulus Objectives

  1. To mitigate impact of COVID-19.
  2. To spur spending (private consumption).
  3. To encourage quality investments.


Fiscal stimulus: an attempt by a government to increase economic activity by reducing taxes, increasing government spending, or both.


Cash Flow to Assist Businesses

  • Deferment of monthly income tax payments for tourism sector. Businesses allowed to revise expected profits in 2020 without penalty.
  • 15% discount in electricity bills to affected sectors (Eg: Hotel, airlines, shopping malls).
  • Exempt Human Resource Development Fund (HRDF) levies for hotels & travel related companies.
  • Exempt 6% service tax for hotels (March – August, 2020).


Financing Assistance

  • Bank Negara Malaysia (BNM) provide RM2b worth of financial assistance of working capital to SME at 3.75% interest rate.
  • Bank Simpanan Nasional (BSN) allocates RM 200m in micro credit facility at a rate of 4%.
  • Approval process for existing loans will be streamlined.
  • Banks required to provide relief in terms of payment moratorium restructuring/rescheduling loans.
  • Malaysia Airport Holdings Berhad (MAHB) provide rebates on rental at airport as well as landing and parking charges.


Tourism Sector

  • RM600 given to travel sector drivers (E.g.: taxi and trishaw drivers not including e-hailing).
  • Personal income tax relief RM1,000 on domestic tourism expenditure.
  • Digital voucher of RM100 per person for domestic travel.
  • Matching grant of RM500m for tourism vouchers and promotions.


Human Capital Development

  • Double deduction on expenses incurred on tourism-related training.
  • RM100m on matching grant to HRDF to fund additional 40,000 employees.
  • RM50m subsidy in digital/high-skilled courses.


Rakyat Assistance

  • EPF employee contribution reduced from 11% to 7% (April – December, 2020) with option to opt out.
  • Bantuan Sara Hidup (BSH) May recipients brought forward to March with RM100 to be paid in May.
  • RM10 million to FAMA to provide food storage facilities to help reduce food prices.
  • RM1,000 – 10,000 grant for local entrepreneurs to promote e-commerce sales.
  • RM2b for infrastructure repair in rural areas.



  • GLC accelerate investment projects (E.g.: TNB invest RM13 billion, in projects such as LED street lights, transmission lines and rooftop solar installations).
  • Co-Investment Fund of RM500m matched by private investors to make up RM2b, to invest in early/growth stage Malaysian companies.
  • Waiving of listing fees by SC and Bursa Malaysia for 1 year for companies with market cap < RM500 million.
  • Import duty and sales tax exemption on purchase of machinery and equipment used in port operations for 3 years commencing 1 April 2020.



In response to soften any potential impact from COVID-19, Malaysia’s fiscal injection is largely targeted to boost personal spending and support tourism as well as affected businesses.

Despite the instability on the local political front, the announcement of the fiscal package signals that the government will likely remain pro-growth in the foreseeable future.

In addition, a significant amount of funds is allocated to bolster investments within the country.


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