New Income Tax System Soon

The Malaysia income tax system will have some change next year with the introduction of a new scheduler tax deduction (STD) system by the Inland Revenue Board, IRB (LHDN).

The new move comes with a good intention to avoid the problem of over deduction by the LHDN, but unfortunately this will convert into a more tedious job by both the tax paying employees as well as their employers.

With the new system, both employers and employees will have to file tax exemptions and rebates on a monthly basis instead of yearly (employees make the submission to the employer and the employer in turn submits to LHDN).

Expenditures that can be put forth for income tax exemptions include purchase of books, magazines, computer and peripherals, equipment for disabled, and payments such as education, alimony, medical check up and so on. On the other hand, rebates can be in the form of tith (zakat) and worker permit pass.

Details of the exact mechanism will be published on LHDN’s website once the new ruling comes into practice. Rounds of talk will also be organized by the LHDN officers to groups of employers nationwide, which will be held in stages.

Other posts you may want to read:

1. Pay Zakat and Get Tax Deduction
2. New Income Tax Deduction on July
3. Tax Body Wants a Cut in EPF Deduction
4. LHDN to Track Down Income Tax Evaders
5. TaxSaya Alternative to Income Tax Payers

Author's bio: Zul is the founder and principal contributor for the SKOR Career blog. He is the author of two books, The Malaysian Job Seeker's Dilemma and Buat Duit Tanpa Kerja Makan Gaji (How to Make Money Without a Job), available in major book stores nationwide. You can reach him at zulkiflimusa[at]gmail.com.