26 November 2020
In October 2020, the Temporary Measures for Government Financing (Coronavirus Disease 2019 (Covid-19)) Act 2020 (“Covid-19 Government Financing Act”) and the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (Covid-19) Act 2020 (“Covid-19 Impact Act”) were gazetted and have partially come into force. This article highlights some of the key provisions of these Acts.
Covid-19 Government Financing Act
The Covid-19 Government Financing Act was published in the Federal Gazette on 26 October 2020. Save for section 3, the Covid-19 Government Financing Act came into effect on 26 October 2020 and will continue to remain in operation until 31 December 2022.
Some of the key provisions of the Covid-19 Government Financing are as follows:
- Section 3 increases the ceiling amount for total sums that may be raised and the total amount of moneys that may be received from 55% of the Gross Domestic Product (“GDP”) of Malaysia to 60% of the GDP of Malaysia; and
- Section 4 establishes a Covid-19 fund for economic stimulus package and economic recovery plans.
Covid-19 Impact Act
The Covid-19 Impact Act was published in the Federal Gazette on 23 October 2020. Save for Part II and Part III for which the effective date and period of operation have been specifically provided for, the Covid-19 Impact Act came into effect on 23 October 2020 and will continue to remain in operation for two years.
Some of the key provisions of the Covid-19 Impact Act are as follows:
- Section 7 provides some respite for contracting parties who could not perform their contractual obligations from 18 March 2020 and who continue to be unable to perform any contractual obligation until 31 December 2020 due to the measures taken to control the spread of Covid-19.
- Sections 11 to 18 extend the limitation periods prescribed under the various laws. The limitation period expiring from 18 March 2020 to 31 August 2020 is now extended to 31 December 2020.
- Section 20 provides that the minimum threshold to present a bankruptcy petition is now RM100,000. The previous threshold was RM50,000.
- Section 34 provides that if a purchaser fails to pay any instalment from
18 March 2020 to 31 August 2020 due to the measures taken to control the spread of Covid-19, the developer cannot impose any late payment charges.
- Sections 49 to 56 provide that the Chief Justice has certain powers to issue any direction relating to the business of the courts or to modify any provision of the rules of court under certain circumstances.