‘Less leakages likely, but concrete reforms still needed'
Thenesh Kannaa, executive director of tax advisory firm Tratax Sdn Bhd, said requiring a TCC before awarding contracts served as a measure to boost tax compliance, particularly among businesses seeking government contracts.
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The Star
3 days ago
- The Star
‘Less leakages likely, but concrete reforms still needed'
PETALING JAYA: The Tax Compliance Certificate (TCC) will minimise leakages in government procurement, according to stakeholders. Thenesh Kannaa, executive director of tax advisory firm Tratax Sdn Bhd, said requiring a TCC before awarding contracts served as a measure to boost tax compliance, particularly among businesses seeking government contracts.
The Star
3 days ago
- The Star
Towards fairer govt tender bids
A safeguard: Since 2023, the TCC has been required for taxpayers or bidders applying for government procurement, initially limited to supplies and services. Tax Compliance Certificate now across all procurements PETALING JAYA: Companies bidding for government tenders must now include a Tax Compliance Certificate (TCC) from the Inland Revenue Board (LHDN) for all jobs, including supplies, services and physical works. The mandate has been standardised across various procurement categories. 'The requirement of a TCC as a mandatory supporting document for government procurement comes into effect on July 1, 2025,' said a Treasury circular signed by the Finance Ministry's secretary of the government procurement division, Datuk Norison Ramli. Government agencies must ensure bidders include the TCC in their tender documents. The circular added that, like local companies, this requirement also applies to foreign countries, including those with which Malaysia has a Free Trade Agreement. 'No exemption is given to bidders operating out of Free Trade zones or industrial zones governed by the Free Zones Act 1990,' read the circular. The ministry stated that if the TCC document is missing, non-compliant, expired or fake, the supplier's bid will be disqualified from further evaluation. For bids that closed before July 1 or are currently being finalised, a compliant TCC must be submitted before the Letter of Acceptance is issued. In such cases, a Letter of Intent will be given to the company, which then has seven days to submit the TCC. If a company fails to provide the TCC, the approving authority will choose another supplier and decide on the next steps. The circular stated that the implementation aligns with the government's goals for fiscal consolidation – policies aimed at reducing deficits and debt to ensure financial stability – revenue sustainability, and encouraging voluntary tax compliance among taxpayers. Since 2023, the TCC has been required for taxpayers or bidders applying for government procurement, initially limited to supplies and services, as announced in Budget 2022. Building on its positive impact, the Finance Ministry, in collaboration with the LHDN, extended the TCC to physical works and consulting services through a six-month pilot project from Oct 1, 2024 to March 31, 2025. This effort entailed the participation of the Public Works Department and the Drainage and Irrigation Department. Given the positive reception from participating government agencies, the circular stated that the TCC submission process is now standardised across all procurement categories and implemented by all ministries and departments. The circular was addressed to the Chief Secretary to the Government, Public Service Department director-general, the Attorney General, the Auditor-General, as well as the chief secretaries of all ministries. The TCC issued by the LHDN serves as an official confirmation that the taxpayer has fulfilled their income tax obligations, which includes the timely submission of tax returns and the payment of any outstanding taxes. In October last year, Bernama quoted LHDN Revenue Collection assistant director Nooraini Mat Ali, stating that new taxpayers or bidders must obtain the TCC by checking their Tax Identification Number via the e-Daftar application at the MyTax portal. She said the TCC is aimed at taxpayers, including individual business owners, cooperatives, trusts, unit trusts, limited liability partnerships, real estate investment trusts, and property trust funds. Enquiries about obtaining the TCC can be directed to tcc@
New Straits Times
09-07-2025
- New Straits Times
Malaysia still competitive despite new US tariffs, says tax expert
KUALA LUMPUR: The United States' recent imposition of a 25 per cent tariff on Malaysian exports has added a new layer of complexity for local businesses. Tax expert Thenesh Kannaa, however, believes it also presents certain advantages compared to other major exporting nations such as China, as Malaysia still enjoys relatively lower tariff rates, which could benefit sectors like rubber gloves. Thenesh, who is a Fellow of the Association of Chartered Certified Accountants (ACCA) and executive director of tax advisory firm Tratax Sdn Bhd, said tariffs are double-edged tools that may provide short-term domestic protection but often result in long-term uncertainty. "In such an environment, professional accountants play a critical role in helping businesses understand and navigate tactical implications," he said. Thenesh said that under the US 'first exporter rule', the effective tariff imposed on Malaysian goods may end up being lower than 25 per cent, but only with proper customs planning and documentation in place. "Any restructuring of supply chains may also trigger transfer pricing implications, including one-off taxable compensations. "Finance professionals can guide C-suite executives through these risks by offering clarity on compliance, valuation and cost management," he said. He added that ACCA supports Malaysia's commitment to maintaining constructive trade dialogue amid shifting global policies, and stressed the importance of the accountancy profession in helping businesses respond with confidence and resilience. It was reported that US President Donald Trump announced a 25 per cent import tariff on products from Malaysia, effective Aug 1. The move, officially communicated via a letter to Prime Minister Datuk Seri Anwar Ibrahim, is said to be part of a broader strategy to rebalance US trade.
