KUALA LUMPUR – Despite the government’s RM340 billion stimulus package, vulnerable businesses are falling through the cracks as there is no recovery plan for them.
Klang MP Charles Santiago in a statement reiterated his call for a plan to sustain small community-based businesses that have not benefited from government aid.
“The government’s special tax rental reduction scheme is not really helpful for most tenants.
“We underlined a few key points from the business sustainability survey by my office that saw the involvement of 1,196 respondents from different community-centred small businesses.”
The poll showed that only 27.8% of such businesses received a rental discount or waiver from their landlords.
“The given amount and duration are also insignificant compared to the toxic combination of high operating costs and falling sales, plus lower revenues,” said Santiago.
He said more than half of the respondents did not get any kind of rental assistance, and that the scheme depends on the mercy of landlords, who are also experiencing losses amid the Covid-19 pandemic and have other financial commitments.
“A staggering 81% of the respondents said they will exhaust their savings in one to three months, forcing them to consider closing their businesses permanently. Worse still, 60.2% said they tried to obtain loans from financial institutions, but failed.”
Based on Santiago’s report, small businesses showed little evidence of having a strong cash flow, and they tend to have a lower credit score as they are still suffering from the effects of movement controls to curb the coronavirus.
“We must acknowledge the critical link between small businesses and local communities. If these small businesses shutter, communities will be drastically affected, as residents depend on them for basic needs and services,” said the lawmaker.
“My office and business association leaders had a follow-up meeting chaired by Deputy Finance Minister II Mohd Shahar Abdullah, along with seven heads of Finance Ministry agencies and Bank Negara Malaysia, on the rental relief fund.
“With an allocation of RM1.7 billion for rental relief, we can save more than 59,000 businesses and 590,000 jobs.”
Aspects of the fund’s framework are listed below:
i) Subsidy amount: 70% of the existing rent, capped at RM7,000;
ii) Subsidy period: two months. Review and renew for another two months (from July to October);
iii) Requirement: community-based businesses or the informal sector; annual revenue drop of more than 40%;
iv) Required documents: business licence and income tax declaration on rental and annual revenue drop;
v) Application method: apply through local governments;
vi) Payment method: direct payment to landlords; and,
vii) Targeted groups: hawkers, restaurants, coffee shops, barbershops, pharmacies and community retail shops, among others. – The Vibes, June 15, 2021
