Legal firms affected by MCO, says Malaysian Bar

KUALA LUMPUR: The Malaysian Bar is urging the government to provide more relief for law firms affected by the movement control order (MCO) as there were "insufficient provisions" for the firms in the recently announced stimulus package.

Its president Salim Bashir (pic) said in a statement on Monday (March 30) that the MCO had impacted national commerce and economic feasibility of small and medium enterprises (SMEs) and this included the majority of law firms in the country.

“The provisions made for law firms are wholly insufficient. The domino effect of the MCO period on the economy requires much stronger support from the government in bolstering law firms, ” he said.

“However, upon examination, it appears that the Prihatin package might only be beneficial for B40 citizens, and also for a sliver of the M40 group, ” Salim added.

He was responding to the government’s Prihatin Rakyat Economic Stimulus Package, which was announced last Friday (March 27).

Salim urged the government to provide interest-free grants and special funds for law firms, a waiver or reduction of interest rates on loans by Bank Negara or financial institutions for the relevant duration of the loan deferments.

“The government is also urged to consider subsidising 50% to 80% of the salaries of the staff of law firms, ” he added.

It also welcomed additional funding, as a special relief facility for law firms, instead of the existing mere offerings of further options for increased debt burdens.

“Initiatives such as microcredit schemes and loan deferments will not do much to help law firms in the long run, ” he said.

As the MCO period continues to the affect cash flow of law firms, the Bar urged the government to either provide for an extension on the submission and payment of income tax beyond April 30 or to do away with tax instalment payments (“CP500”) for the year 2020, instead of an optional deferment as part of the stimulus package.

While he noted that the package made a provision for the deferral of payments, the restructuring and rescheduling of employers’ contributions, Salim also called for the government to look into reducing the allocated percentage of employers contribution to the Employees’ Provident Fund (EPF).

“A balance must be struck between proiding for business owners as well as employees in protecting and defending the economy from a crisis, ” he said.

Salim added that the government must support SMEs and law firms as they form the lifeblood of the national economy.

“It is not about bailing out a business but about helping out people that rely on that business.

“The government must do so by assisting law firms in maintaining sustainable businesses, through creating opportunity and providing incentives.

“Such support for law firms will spur a revival of the economy, through the revitalisation of other business operations and sectors that rely on legal services, ” he added.

Lawyer Ahmad Maududi Mahdi, 35, who recently founded his own one-man law firm in Terengganu just three months ago, said most government offices such as the land office, the land and mineral office (PTG) and the Inland Revenue Board (LHDN) are closed due to the MCO and as such he is unable to carry out his business.

“Work can’t be completed and fees from clients are pending, ” he said, adding that the fees are used to finance the firm.

Ahmad Maududi added that small firms such as his do not have big budgets.

“Budgets are constrained. We don’t apply for loans, ” he said when contacted.

The 35-year-old said the stimulus package focused more on the employees rather than the employers and the optional loan for SMEs and law firms would only be an additional burden in the long run.

“However if I compare my firm to other small firms, I am slightly lucky because I have no staff at the moment so my rented office overhead is still bearable, ” he added.

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Malaysian Bar , Salim Bashir , MCO , law firms , economy


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