Latest news with #CTIM
New Straits Times
10-06-2025
- Business
- New Straits Times
Tax institute lauds SST move as step toward fiscal resilience
KUALA LUMPUR: The Chartered Tax Institute of Malaysia (CTIM) has lauded the government's move to expand the Sales and Services Tax (SST) framework starting July 1, calling it a timely and strategic effort to enhance fiscal resilience. CTIM president Soh Lian Seng said the revision is a pragmatic step towards fiscal sustainability without reintroducing the Goods and Services Tax (GST) or raising direct taxes. "As Malaysia's service-based economy continues to grow, CTIM recognises the government's effort to broaden the tax base by incorporating more sectors into the SST regime. This aligns with global trends and reflects a pragmatic approach to fiscal sustainability," Soh said in a statement. He said the clarity provided through gazette orders was commendable and would aid businesses in understanding and complying with the new requirements. "The clarity through gazette orders and the targeted approach are commendable. We encourage continued engagement and practical support to help businesses adapt," he added. CTIM acknowledged the short lead time before implementation and urged affected businesses to act promptly to register or update their systems, noting that the July rollout was aligned with the remaining taxable periods for the year. To facilitate a smooth transition, CTIM called on the government to set up dedicated support channels, such as hotlines, email services or live chats, staffed by knowledgeable personnel to provide timely guidance and reduce compliance risks. The institute also welcomed the issuance of transitional rules and guidance to support businesses but stressed the need for continued dialogue with authorities to resolve potential implementation challenges. "CTIM stands ready to explain the government's initiatives and offer constructive feedback where improvements are possible," said Soh.
The Star
10-06-2025
- Business
- The Star
Govt targets RM5bil from SST revision
Minister of Finance II Datuk Amir Hamzah Azizan PUTRAJAYA: The government expects to raise RM5bil from the revision of the sales tax and expansion of the service tax (collectively SST) to other services effective July. Finance Minister II Datuk Seri Amir Hamzah Azizan, said the revision of the SST is driven by the need to improve the fiscal space of the federal government to improve the delivery of service to the public and lower the cost of living besides increasing the amount of cash assistance to the people. 'To ensure that the majority of the people are not affected by the SST revision, the Madani government is taking a targeted approach to ensure that basic goods and services are not taxed. 'In addition, various facilities are also provided to reduce the impact on micro, small and medium enterprises,' he told a media briefing here yesterday. Hence, Putrajaya has maintained zero sales tax on essential goods like rice, chicken meat, and vegetables but introduced a 5% tax on goods such as king crab, salmon, truffle and essential oil as well as raise the sales tax to 10% for products such as racing bicycles, antique hand paintings and tungsten scrap residues from 5%. It has broadened the tax base and imposed a 8% tax on services such as rental and leasing, financial and beauty services, and a 6% tax on construction, healthcare and education services. The Chartered Tax Institute of Malaysia (CTIM) said the move to revise the SST was timely and a strategic use of indirect taxation to enhance government revenue without resorting to further direct taxes or reintroducing the goods and services tax at this juncture. 'As Malaysia's service-based economy continues to grow, CTIM recognises the government's effort to broaden the tax base by incorporating more sectors into the SST regime. 'This aligns with global trends and reflects a pragmatic approach to fiscal sustainability,' it noted in a statement. CTIM added to ensure a smooth transition, it urged the government to establish dedicated support channels – such as hotlines, emails, or live chats – manned by knowledgeable personnel to provide timely responses and minimise compliance risks. The collection of the SST from registered businesses will begin next month and for companies that now come under the tax space collection, it is expected to begin in September after such businesses have registered with the Customs department. This extension of the SST is accompanied by selected exemptions to avoid double taxation as well as ensure that certain essential services for Malaysian citizens are not taxed, Amir Hamzah added. Details are available on the Royal Malaysian Custom's department's website. Putrajaya collected about RM45bil in SST in 2024. According to the Finance Ministry's official first quarter 2025 Economic Report, the federal government's revenue for the quarter amounted to RM72.1bil, driven in part by a surge in SST receipts which totalled RM11.1bil. The reimplementation of SST in September 2018 saw the government collect RM5.4bil for the period. Annual SST collection in 2019 amounted to RM27.6bil, RM25.2bil in 2020, RM25.5bil in 2021, RM31.3bil in 2022 and RM35.4bil in 2023.
Malaysiakini
09-06-2025
- Business
- Malaysiakini
'Revising SST a pragmatic approach to fiscal sustainability'
The government's broadening of the tax base by incorporating more sectors into the Sales and Service Tax (SST) regime reflects a pragmatic approach to fiscal sustainability, according to the Chartered Tax Institute of Malaysia (CTIM). Its president Soh Lian Seng noted that the rationale for the revision and expansion of SST includes strengthening the country's fiscal position to better support the well-being of the people and making SST a more progressive and targeted tax. 'CTIM views this move as...
The Star
09-06-2025
- Business
- The Star
CTIM: Revision and expansion of SST a pragmatic approach to fiscal sustainability
Chartered Tax Institute of Malaysia president Soh Lian Seng KUALA LUMPUR: The government's effort to broaden the tax base by incorporating more sectors into the Sales and Service Tax (SST) regime aligns with global trends and reflects a pragmatic approach to fiscal sustainability, according to the Chartered Tax Institute of Malaysia (CTIM). President Soh Lian Seng noted that the rationale for the revision and expansion of SST includes strengthening the country's fiscal position to better support the well-being of the people and making SST a more progressive and targeted tax. "CTIM views this move as a timely and strategic use of indirect taxation to enhance government revenue without resorting to further direct taxes or reintroducing the Goods and Service Tax (GST) at this juncture,' he said in a statement today. Earlier, Finance Minister II Datuk Seri Amir Hamzah Azizan announced that the government will implement a targeted revision of Sales Tax rates and an expansion of the Service Tax's scope effective from July 1, 2025. According to Soh, the institute will continue to analyse the gazette orders in detail and provide feedback should any inconsistencies with current legislation or practices arise. He said CTIM is committed to assisting the business community in understanding the government's initiatives. "At the same time, we will bring forward suggestions for enhancements where appropriate, in the spirit of collaboration and shared national interest. "The clarity through gazette orders and the targeted approach are commendable. We encourage continued engagement and practical support to help businesses adapt,' he added. To ensure a smooth transition, CTIM proposed that the government establish dedicated support channels such as hotlines, email, or live chat, manned by knowledgeable personnel, to provide timely responses and minimise compliance risks. "CTIM welcomes the issuance of transitional rules and guidance to support the implementation process. While these are helpful, we anticipate that further engagement with the authorities will be necessary to address practical issues that may emerge,' he said. - Bernama
New Straits Times
03-06-2025
- Business
- New Straits Times
Expert advice on how SMEs can avoid tax filling as once-a-year scramble
KUALA LUMPUR: Small and medium enterprises (SMEs) should take a more structured approach to manage their corporate tax obligations to avoid penalties and ensure smooth compliance. Chartered Tax Institute of Malaysia (CTIM) council member Harvindar Singh said while many business owners remain focused on day-to-day operations, tax matters often take a back seat until submission deadlines loom, resulting in rushed filings and avoidable mistakes. "Tax filing should not be a once-a-year scramble. With the right approach and record-keeping, SMEs can make it a smoother, more predictable process," Harvindar told Business Times in an interview. Companies have eight months from the end of their financial year to submit their income tax return (Form C), factoring in the Inland Revenue Board's (IRB) one-month grace period. For instance, a company with a Dec 31, 2024 year-end must file by Aug 31, 2025. More crucially, companies must also submit tax estimates (Form CP204) a month before the new financial year and make monthly installments starting from the second month. These estimates can be revised in the sixth, ninth and 11th months of the basis year. "The IRB discourages taxpayers from using the government as a funding mechanism. It's a pay-as-you-earn system," Harvindar said, adding that penalties apply for underestimation or late payments. Common mistakes and missed opportunities Among the most common errors SMEs make are misclassifying deductible and non-deductible expenses, overstating capital expenditures as tax-deductible, and failing to maximise claims on capital allowances. "A lot of taxpayers do not analyse their expenses properly. Renovation costs, for example, may be lumped under repairs and maintenance and mistakenly claimed as deductions," he explained. Harvindar emphasised the importance of being aware of eligibility criteria and maintaining proper documentation when it comes to tax incentives. He said some incentives, like pioneer status or reinvestment allowances, must be approved in advance and may be rejected if a business has already started operations. "Documentation is key. The IRB can request for original or digital records, and if these are missing or incomplete, legitimate claims may be rejected," he said. He also advised businesses to structure employee compensation wisely and consider incentives such as the Private Retirement Scheme, which offers corporate tax deductions of up to seven per cent on contributions. Be audit-ready, always Harvindar pointed out that companies must always be audit-ready as part of Malaysia's self-assessment tax regime. Tax audits are typically announced in advance, but investigations can occur unannounced, especially if the IRB suspects malpractice. "Keep your records for at least seven years, as required by law. Sales invoices, purchase receipts, payroll records, loan agreements—these are all vital," he said. Businesses with related party transactions must ensure proper transfer pricing documentation is in place to avoid scrutiny during audits. Staying ahead of tax law changes With rapid tax law developments, including the rollout of e-invoicing and capital gains tax, Harvindar encouraged SMEs to stay updated through tax professionals. "Even as a consultant, it's overwhelming to keep up. It's critical for SMEs to work closely with their tax agents or accountants to stay compliant and avoid costly oversights," he said. Ultimately, good tax planning, according to Harvindar, is not about avoiding tax, but aligning business decisions with the law for optimum outcomes.
