Corona-Pandemic: Immediate Taxation, Legal Measures and Financial Aid in New Zealand, Malaysia, Nepal and Vietnam

To stabilise the market many countries have released a second aid package. New Zealand and Malaysia have set up high budgets to support enterprises. Vietnam and Nepal are taking more strict measures, although the situation appears to be under control. Our experts summarise the most important points.

New Zealand

The New Zealand government has put a lockdown in place for 4 weeks commencing 26 March 2020 and is addressing the situation daily.

The government has made a NZD (New Zealand dollar) 12 billion aid package available to businesses that have been affected by the COVID-19 control measures. The stimulus package covers the following key features:

• A wage subsidy scheme in which employers have been given a fixed amount per employee for a 12-week period to preserve jobs.
• Redundancy support to workers who have lost jobs due to business closures.
• Protection for tenants of residential property, mainly in the form of a rent freeze.
• A mortgage repayment holiday scheme offered by banks to house owners to prevent unnecessary losses due to reduced incomes caused by the pandemic.
• Emergency social welfare benefits.
• A business finance guarantee scheme whereby affected businesses which need to borrow to stay afloat will have 80% of those borrowings guaranteed by the government.
• The Reserve Bank of New Zealand has cut the official cash rate for borrowers to 0.25%.

Tax Measures: Part of the assistance package are new tax measures designed to support businesses affected by COVID-19. These include:

• Depreciation on commercial and industrial buildings.
• Immediate deductions for low value assets.
• Revision of provisional tax obligations for small businesses. The threshold at which provisional tax is payable has been increased from NZD 2,500 to NYD 5,000. This is likely to benefit smaller taxpayers and potentially delay the due date for tax payments for the tax year 2020/21 until the final tax due date of 7 February 2022.
• Writing off interest on late payments of tax for certain taxpayers.
• Other measures include changes to the calculation of the in-work tax credit to remove the hours worked test and providing the Inland Revenue Department with greater information sharing powers to facilitate a comprehensive government response to COVID-19.

Additional measures are expected to be rolled out as the situation continues. The Ecovis New Zealand team is maintaining its commitment in assisting you with its professional services as well as helping clients to apply for the financial support provided by the government. We aim to help our clients navigate through these difficult times.

Malaysia

The Malaysian government has released an Economic Stimulus Package, which was announced by Prime Minister Tan Sri Muhyiddin Yassin on 27 March 2020.

The key features include:

• One-time cash support for households, estimated to benefit 5.5 million family households and 3.5 million singles.
• A MYR (Malaysian ringgit) 1 billion budget for the food security fund.
• The Health Authority is planning to spend MYR 1 billion on the purchase of medical systems.
• MYR 8 million is set aside for testing for COVID-19.
• Insurance payments are postponed for 3 months.
• From 1 April 2020, all medical workers, including doctors, nurses and assistants, can receive an additional monthly bonus of MYR 600 per person.
• From 1 April 2020, all military, police, customs staff, and volunteer guard forces can receive an additional monthly bonus of MYR 200 per person.
• Enhancement of the Household Living Aid fund (Bantuan Sara Hidup, BSH).
• 6-month postponement of repayments to the Skills Development Fund Corporation (Perbadanan Tabung Pembangunan Kemahiran, PTPK).
• MYR 25 million for NGOs providing medical treatment, shelter and food to social welfare organisations and the homeless.
• Up to 6-month payment deferral for public housing tenants.
• From 1 April 2020, a discount of 15%-50% on electricity provided to households for 6 months.
• A MYR 100-200K special fund for agricultural and fishing organisations to secure sufficient supply for 3 to 6 months.
• A 6-month rent holiday for all state-owned organisations such as school canteens, kindergartens, restaurants and convenience shops.
• MYR 100 million for goods storage and distribution centres.

On 25 March 2020, the government announced the extension of the Movement Restriction Order, which means that all offices should be closed until 14 April 2020.

ECOVIS Malaysia is committed to safeguarding the health of our staff and clients. However, we will do our best to prevent disruptions to our workflow. We remain at our clients’ disposal to provide help with any urgent request and where needed. We are here to provide our best support in guiding our clients through this difficult time.

Nepal

The Government of Nepal has introduced new relief packages:

• Employees’ salaries for the month of March 2020 and the subsequent lockdown period shall be covered by the employer. However, the funds can be taken from the company’s Corporate Social Responsibility fund.
• If the employee and employer are registered in the Social Security Fund (SSF), then the SSF contributions will be covered by the Nepalese government.
• The Nepal Food Corporation and Salt Trading Corporation will provide a discount of 10% on products such as rice, flour, sugar, salt and cooking oil.
• Nepal Telecom will provide discounts of 25% to internet and data package users during the lockdown period. Other private telecom companies are also being encouraged to do the same.
• Nepal Electricity Authority shall provide a 25% discount to domestic consumers using up to 150 units per month.
• Internet, water, electricity and telephone charges for the months of March and April can be paid by the middle of May without any penalty.
• Discounts of 30%-50% on electricity consumption bills will be provided to companies in the manufacturing industry, depending upon the nature of the company.
• Doctors, nurses, technicians, social workers, ambulance drivers, employees, cleaners and security guards working on the control and eradication of coronavirus shall be provided with free insurance and compensation of up to NPR 25 lakhs (2.5 million Nepalese rupees) until mid-July 2020 and will also be provided with free safety equipment.
• Private hospitals must make the necessary arrangements to import the required medical equipment and continue to provide all their facilities at a 20% discount on bills issued until next year.
• Private schools must waive fees for one month to secondary level, except for residential fees.
• House owners in city areas must waive rents for one month for tenants working in the casual sector.
• Customs duty shall be waived on imports of medical equipment by both the private and public sector.
• The extension for the VAT return and payment for the month of March has been extended until the middle of May 2020.
• The extension for the withholding tax return and payment for the month of Falgun (February/March in the Gregorian calendar) has been extended until the middle of May 2020.
• The deadline for the provisional tax return and 2nd instalment of income tax under the Income Tax Act has been extended until the middle of May 2020.
• Any amount donated by companies to the Corona Relief Fund shall be eligible for deduction from assessable income.
• The deadline for all payments and documents to be submitted to the Company Registrar Office for renewal in the month of March has been extended until the middle of May 2020, with no late fees.
• The deadline for all payments and documents to be submitted to the Department of Commerce and Industries for renewal by partnerships, private and other companies has been extended until the middle of May 2020, with no late fees.

ECOVIS Nepal is monitoring the situation and will deliver the latest measures to help clients get through the difficult time.

Vietnam

Vietnam has applied a lockdown to the whole country. Houses, villages and provinces are fully isolated from each other.

Citizens are required to stay at home all the time, except in absolutely necessary or emergency cases, or to go to work in essential industries.

Manufacturing facilities and essential service providers are not subject to this lockdown, but must ensure that the necessary prevention measures are applied. 

Government offices are working from home, except for the security services and the medical sector.

Ecovis Vietnam is providing support to our clients without any service interruptions.