The last two years have seen a multitude of changes in the tax and statutory landscape impacting both employees and corporations alike. Several tax amendments and relief schemes were announced under the 2021 National Budget to ensure jobs were fortified and the economy stayed well-oiled amidst the movement restriction orders.
Despite the fact that many businesses had to shut down during the MCO of 2020, a large number of them, with the exception of the manufacturing and FMCG sectors, resumed operations online. That being said, everybody was required to abide by all the statutory regulations that were announced in the wake of Covid-19 and meet compliance as per the decided deadlines.
For example, under the 2021 Budget, the Malaysian government has decided to reduce the income tax for resident taxpayers earning between RM50,000 (US$12,375) to RM70,000 (US$17,325) by one percentage point, bringing it down from 14% to 13%.
It has also announced that non-Malaysian C-suite executives in companies looking to relocate to Malaysia are eligible to receive a flat income tax rate of 15% if they meet certain requirements. Malaysian Investment Development Authority (MIDA) closes application deadlines for this incentive on December 31, 2021 – a date that you might need to pin up if you have candidates in this category.
The government has also announced 100% tax cuts for employees losing their jobs due to ill health. It has also slashed employee EPF contribution rates from 11% to 9% for a period of 12 months beginning January 2021. Resident taxpayers and their families also stand to benefit from income tax relief on medical expenses as directed by the government.
Certain tax developments like exemptions on income tax for purchases of laptops and smartphones and Covid-19 vaccination exemptions have only come into place due to the virus outbreak and need to be factored in while computing employee payroll.
For a lot of us, tracking all these minutiae on regulatory changes is a big hassle, especially as we are busy running every day operations. The world of taxes is constantly evolving. You only know how entangling it is until you skip a payment or a filing. It’s not just about keeping tabs on the taxes or the claims, it’s also about knowing when to file them, where to file them and how to file them.
One may be okay with paying fines for a single tax error, but if you miss an important one, then be ready to predict the damaging effects it will have on your company reputation – both financially and morally. Especially during Covid times, running around to shell out extra on all those tax penalties may not be the best option when you should be trimming down wasteful expenditure.
Propay Partner’s Compliance Helpdesk is a 24X7 hotline that weeds out all regulatory and compliance hassles. Our helpdesk guides clients on internal policies and procedures, as well as federal and state laws. Our compliance executives also prioritise educating clients to help them institute practices within their firms that will ensure the highest possible level of compliance.
Changes relating to statutory and non-statutory contributions which have a direct bearing on payroll -- like changes pertaining to tax, EPF, SOCO, EIS and HRDF rulings are flagged by our team much ahead of the stipulated deadline. Notifications on changes in tax will be sent to clients upon announcement from the government or respective statutory body as and when it happens.
So far, our compliance helpdesk has been instrumental in clearing queries relating to tax treatment for payroll payment and benefits-in-kind (BIK) and whether they are subject to tax/ exemption/not taxable. Clients also get in touch to find out if certain payroll are subject to EPF or not. With tax, EPF, SOCO, EIS and HRDF rulings set to change in the near future, we anticipate more enquiries on the same from clients as well as companies considering payroll and compliance outsourcing.
Our helpdesk will help you resolve your tax and payroll issues without delay. Cases will be handled one-on-one with a dedicated compliance executive answering all your queries on phone or mail whenever you choose to contact us. To learn more, contact us at compliancedesk@propaypartners.com or visit Propay Partners.
