ATTENTION TO :
YAB Tan Sri Muhyiddin Yassin
Prime Minister of Malaysia
Office of the Prime Minister of Malaysia
Main Block, Perdana Putra Building
Federal Government Administrative Centre
62502 Putrajaya
YB/YBhg Tan Sri/Dato’ PLEASE ASSIST :
-
- YB Dato’ Sri Mustapa bin Mohamed, Minister of Economic Affairs Malaysia
- YB Senator Tengku Dato’ Sri Zafrul Tengku Abdul Aziz, Minister of Finance Malaysia
- YB Datuk Sri M. Saravanan, Minister of Human Resources Malaysia
- YB Dato’ Seri Mohamed Azmin bin Ali, Senior Minister of International Trade and Industry Malaysia
- YBhg Datuk Seri Mohd Zuki bub Ali, Chief Secretary to the Malaysia, Government
- YBhg Tan Sri Dr. Jeffrey Cheah, Member of the Economic Action Council (EAC)
Yang Amat Berhormat Tan Sri Dato’ Muhyiddin,
REF: SECOND STIMULUS PACKAGE PROPOSAL OUTLINE – APPEAL TO CONSIDER THE WELFARE OF EMPLOYERS IN THE WELLNESS HEALTH & SPA TOURISM INDUSTRY
Salam Hormat and greetings to you.
On behalf of our members and the industry who are suffering a drastic drop in sales of 50% – 80% in this first quarter, the Malaysian Association of Wellness and Spa acts as a voice for these groups of people and companies. The Wellness Tourism Health & Spa industry is already showing deteriorating signs with no sales, no cash, and to the extent of closing permanently. Drastic measures and actions have to be taken by the Government to help everyone to survive and protect the country’s economy before it gets worse.
YAB Perdana Menteri, the economic second stimulus package failed to meet the needs of wellness tourism especially small and medium-sized enterprises (SMEs) and has also failed to address problems of employee retention.
The coronavirus outbreak is first and foremost a human tragedy, affecting hundreds of thousands of people and having a growing impact on the global economy. In line with this crippling effect of this virus on the economy, we have prepared a Stimulus Package Proposal Outline for your urgent attention.
They are as follows: –
- Blanket non-preferential treatment cutting across all segments and all customers – without preferential treatment to credit scoring/risk. Banks to give their immediate support for the next 6 months deferment on repayment of all banking loans, housing loans, hire purchase, overdraft, and other business-related loans and facilities. Immediate deferment of the loan principal payment, so that the companies have sufficient cash flow to sail through this COVID 19 outbreak period. Banks should not discredit companies who applied for the deferment of loan principal payment by lowering their credit rating. This will assist to reduce the possibility of an increase in retrenchment that may eventually lead to the overall increase in the unemployment rate in the country. In order to help the most vulnerable to survive, it is imperative to provide support to companies that serve those populations. Fast action is required as time is of the essence.
- Exemption on statutory obligation payments for a minimum of 6 months and rebate on utility bills
Minimum 6 months exemption on all statutory obligation payments like Employees Provident Fund (EPF), SOCSO and other related payments. The current stimulus package proposes a 4% deduction in EPF contribution by employees from April to December 2020, we proposed similarly the percentage of contribution from employers to also be reduced. We would also like to counter propose for an absolute exemption on EPF contribution for both employers and employees for 6 months starting 1st April 2020 to help preserve the cash flow and spur domestic spending.
Rebate of 50% on utility bills such as Tenaga Nasional Bhd (TNB) across the board for all industries and households during Movement Control Order would help a great deal in lifting off some burdens for the nation. TNB would be able to recoup when businesses are back to normal instead of losing ‘continuous’ revenue should the situation worsen. - Roll out on soft loan
Quick soft loan without collateral to be rolled out immediately under the stimulus package introduced by the government. Loan for up to 20% of the annual turnover with minimal interest (0% per annum) rate should be given.
- Exemption of Sales and Services Tax (SST)
If 6% SST is waived, our wellness services could boost sales as customers will take advantage of reduced prices. This also would encourage local travel and promote “Cuti-Cuti” Malaysia.
This should be activated once the active containment phase of COVID-19 is over and free movement of people is established.
Exemption of the Sales and Services Tax (SST) for all sectors until December 2020 and that will directly affect sectors such as Hotel Spa, Resort Spa, Retail, Restaurants and Destination spa.
- Special Incentives for Wellness Tourism Industry
Appeal to the government to refund our security deposit for foreign therapist immediately to help us with our cash flow. Many of our members are still waiting for our security deposit to be refunded.
We also would request that the government reduce the security deposit from RM3000 to RM1000 to ease our burden on hiring a foreign therapist. This is an issue that we had been appealing for the longest time as there is still a lack of specialized manpower in this industry.
We also appeal for a special incentive fund to be provided to NGOs and training providers with the aim to train the B40 group for the purpose of employment in the wellness industry.
- Granting tax break for employers and employees
Offering a six-month tax break free for businesses (employers) and working individuals (employees) help prop up the economy amid this outbreak that is hitting hard on not just the Malaysian economy but the world.
- Double tax deduction for companies that pays salary to the B40 group
Double tax deduction for companies for salary to be paid to the B40 group,
an additional tax deduction for salary to be paid to local workers, to encourage
the continued employment of the local workers and reduce the possibility of job retrenchment. We hope that Ministry of Human Resource will provide the necessary funding support to the companies and/or the employees, when in the extreme case where companies have no other option but to ask the employees to take unpaid leaves during the critical period.
- Postponement of Visit Malaysia Year 2020 and other low impact projects
To postpone the Visit Malaysia Year 2020 and other low impact projects with immediate effect and to channel those funds to all those affected
entrepreneurs, SMEs and SMIs by giving direct cash handout; - Landlords to ease rental rates for a period of 6 months
Government to strongly urge malls/commercial landlords to ease rental rates down by a minimum of 50% for a period of 6 months OR 6 months on Gross Turnover (GTO) only and partly subsidized by the Government to mitigate the businesses. Government link companies that owned malls (i.e PNB, Khazanah, PHB, etc) to set in motion, kickstart and spearhead this effort. Moreover malls practice percentage rent on gross turnover and has profited over the years.
If this is not carried out, we will foresee many retailers will close before year-end and create unnecessary retrenchments and unemployment. Alternatively, malls/commercial landlords to allow temporary closure of stores till situation stabilizes without any rent incurred or allow tenants to utilize the security deposits to offset against rental. Three months of security deposits to be used as the next four to five months’ rental. - Measures to reduce employers’ biggest burden and keeping Malaysians employed
Keeping Malaysians employed should be one of our main concerns and to do so, the Government needs to ensure that employers can survive this downtime. For the service industry, the biggest expense is wages and the Employees Provident Fund (EPF).
Thus, with this subsidy, both employers and employees can have a breather
as companies will then be able to sustain their businesses for a much longer
period and employees will be able to keep their jobs, giving them much-needed job security.
The government strongly advises all employers especially those severely
affected to avoid retrenchment but to offer pay cuts instead. It is still better for employees to accept a pay cut than to lose their jobs as securing a new job in this situation would be tough. The pay cuts will help the employers a great deal in saving on their operational costs and to sustain the business for much longer.
Employees can be offered incentives or higher bonuses to replace the lost
savings by employers who make decent returns by the end of the year.
- Moratorium and blanket offer from banks for business and personal loans on all financial products
Government to strongly urge banks to offer at least a six months moratorium and blanket offers to all businesses (especially SMEs, SMIs and small entrepreneurs, being the primary contributors of the economy) and individuals on all financial products including but not limited to business loans, overdrafts, personal loans, hire purchases and credit cards. These moratorium and blanket offers must be offered at no cost and risk-free without any penalty, late or interest charges.
We humbly submitted the above rescue proposals to be seriously considered and implemented so as not to be excluded from the stimulus package for the sake of the country’s economy and the livelihood of the people in our wellness tourism industry for which we are deeply concerned.
Sekian, terima kasih.
Yours sincerely
Dorothea Justin
President of MAWSPA 2020-2021