“(This) would be particularly welcomed by the small and medium enterprises and individuals as it would provide much needed breathing space and further ease the tight cash flow that they are currently experiencing,” FMM president Soh Thian Lai said in a statement.
Soh also noted that the end of the current six-month moratorium would coincide with the end of the Wage Subsidy Programme (WSP) payment period, creating a “double cost whammy” on businesses which he said could severely impact their sustainability and initiatives to revive their businesses.
As of July 6, the programme had benefitted 310,622 employers covering 2.48 million workers, an indicator that companies are unable to sustain their businesses and have had to resort to obtaining aid from the government to sustain their employment cost and ensure that their workers remain employed.
Soh said the Covid-19 pandemic and movement control orders (MCOs) had seen businesses suffer a huge drop in revenue as well as severe trade challenges which have impacted business sustainability, employment and productivity.
While essential sectors were allowed to operate in stages during the MCO period, they were still impacted by disruptions to their supply chains and ability to meet their trade obligations – especially export orders – as they were only operating at half their capacity.
Soh said many businesses, especially those in the non-essential products and services, only commenced operations after the recovery MCO took effect on June 10.
“Manufacturing companies supporting the construction and hospitality industries were further impacted as these sectors have only just started to resume operations given the additional conditions and precautionary measures and SOPs,” he said.
FMM also called for an extension of stamp duty exemptions to all loan and financing instruments for a one-year period from July 1, 2020 until June 30, 2021.
Currently, stamp duty exemptions are only granted for instruments of transfer (partial exemption) and loan agreements (full exemption) for sale and purchase agreements signed between June 1, 2020 and May 31, 2021.
It also proposed that the stamp duty exemption be extended to mergers and acquisitions and partnership agreements agreed on or signed prior to the outbreak of the Covid-19 pandemic.
Soh said some of the documents were signed before the pandemic and were only now proceeding, adding that they would take a longer time to be implemented given the changes that took place over the past few months.
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