Towards fairer govt tender bids

The Star

4 days ago

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 [e-mail].