Month: April 2020

Announcement — Penalty in MySST system for late payment of taxes on Taxable Period included in the Movement Control order (MCO) period

Announcement — Penalty in MySST system for late payment of taxes on Taxable Period included in the Movement Control order (MCO) period

  • Due to inevitable time and system constraints during the MCO, penalties on Taxable periods which are included in the MCO period will still be generated in the MySST as usual. However JKDM will remit the penalties as soon as possible.
  • Actual Due Date of the taxable period and the date of penalty generated are as follows:
No.Taxable periodDue Date to submit
return and payment		Date of penalty
generated
1.Jan-Feb 202031/3/20201/4/2020
2.Feb-Mar 202030/4/20201/5/2020
  • Any Bill of Demand (BOD) on penalties elligable for remission during the Movement Control Order (MCO) the will be remitted by JKDM as soon as possible.
    Application for remission of these penalty is not required.

Allow SMEs to defer paying income tax till December 2020

Allow SMEs to defer paying income tax till December 2020

Accountants urged the Government to permit small- and medium-sized enterprises (SMEs) to defer income tax instalment payments up to December 2020 instead of a three-month period ending in June 2020.

The Malaysian Institute of Certified Public Accountants and Malaysian Rating Corporation Bhd said that several SMEs were facing bankruptcy as their cash flow and revenue ran out with overhead expenses accumulated with the movement control order. The Government could consider extending the deferment until December 2020 as the impact of supply chain disruptions would be felt even after the COVID-19 outbreak ends.

The Government permits all SMEs to postpone income tax instalment payments for a three-month period commencing 1 April 2020 under the Prihatin Rakyat Economic Stimulus Package. This measure is in addition to the tax instalment payment postponement provided to impacted businesses in the tourism sector for six months, also beginning from 1 April 2020.

The accountants said that it is essential for financial institutions, namely commercial banks and development financial institutions, to step forward at this critical moment in Malaysia’s economic history. It is necessary that they continue to introduce funds into the economy and support economic activities by lending to viable businesses.

Otherwise, Malaysia could end up with thousands of business failures which would have dire implications on the financial system, economy and labour market. The two organisations said that the surge in business failures could also trigger large-scale social problems.

Source: Free Malaysia Today

COVID-19: Advice for Employers

What should employers do for the salaries, wages and related costs during Movement Control Order (MCO)?

With the implementation of the Order from 18 March 2020, employers are now facing a problem, i.e. continue to pay employees’ salaries while work cannot be performed due to MCO. What should employers do?

Current status：

1) Employers are required to pay salary and related allowances during MCO, except for transportation allowance and attendance allowance. Employers cannot force their employees take annual leave or unpaid leave.

If an employer decides to retrench, temporarily lay-off or reduce salary, the employer must report to the Ministry of Labour via Borang PK.

3) For employees with a monthly salary less than RM4,000 and contribute to EIS, employers can submit applications with Perkeso since 20 March 2020 and get 6 months financial assistance (RM600 per month) if their employees go for unpaid leave. (Submission of Borang PK is necessary).

Recommendations：

1) As it is rather difficult to predict the end of MCO, employers are advised to submit Borang PK to the Labour Department in order to obtain the rights to retrenchment, temporarily lay-off, voluntarily separation scheme (vss) or salary reduction of employees.

2) Employers may announce the available options to their employees as below: –

  • Adjust working hours based on workload at home and the salary accordingly (e.g. 2 working hour per day, and the remaining 6 hours are treated as unpaid leave);
  • Working hours remain at 8 hours per day and implement temporary pay-cut (e.g. reduce 20%);
  • Unpaid leave for those who are unable to work from home;
  • Voluntary Separation Scheme (VSS).

Please seek professional advice from HR professionals or the Labour Department before implementation of your plan.

Useful links

👉Download Borang PK – http://jtksm.mohr.gov.my/…/Pemberhentian_Peke…/borang_pk.pdf

👉Employment Retention Plan (ERP) – https://www.facebook.com/LANDCO.MALAYSIA/posts/891003541348043

👉Employment Insurance System (EIS): https://www.liew.my/social-zh/eis-zh/

👉Borang PK Guidance – http://jtksm.mohr.gov.my/images/pdf/Borang/Pemberhentian_Pekerja/garis_panduan_pemberhentian_pekerja.pdf