LETTER | EPF should do more for SMEs

LETTER | The enhanced measures announced by the prime minister on April 6 are most appreciated and will provide much-needed relief to the small and medium enterprises (SMEs).

Malaysian businesses - both big and small - are severely impacted by the double whammy arising from curtailed operations during the movement control order (photo) and the downward spiralling economy worldwide.

Employees Provident Fund (EPF) is one authority which could and should do more for the SMEs and the overall Malaysian corporate sector.

EPF had reduced the employees' contribution from 11 percent to seven percent for six months. Additionally, it allows employees to withdraw RM500 per month from their own savings.

However, the above measures do not at all help SMEs’ very tight cash flow. 

EPF had stated that they will assess the specific conditions of the affected companies under its Employer Advisory Services (EAS). EPF had mentioned it could, on a case-by-case basis, offer staggered payments for outstanding contributions.

Unfortunately, employers will then find themselves having to make deferred payments as well as the current payments together later. This represents double payment in the context of cash flow during a time of protracted economic recovery. 

In essence, employers are just differing and snowballing their cashflow problems.

EPF should instead consider freezing payments from both employers and employees for three months, that is, from April to June 2020.

To ensure that this is not misused by the employers, there can be the condition that this concession is only allowed if the employers do not terminate or retrench any of the employees for the period of nine months till December 2020.

EPF should seriously consider the above to help keep afloat businesses as well as employment.

The writer is the country managing partner of Grant Thornton Malaysia. 

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

Keep up with the latest information on the outbreak in the country with Malaysiakini's free Covid-19 tracker.

Malaysiakini is providing free access to the most important updates on the coronavirus pandemic. You can find them here.

Help keep independent media alive - subscribe to Malaysiakini.