Latest news with #Koong
The Star
4 days ago
- Business
- The Star
‘Stamp duty for job contracts another burden for businesses'
PETALING JAYA: Exempting employment contracts from stamp duty would ease unnecessary financial and administrative burdens, say industry players. They argue the added pressure is especially difficult for businesses, particularly small and medium enterprises (SMEs), already grappling with economic uncertainty and labour shortage. The appeal comes as the Inland Revenue Board (LHDN) begins actively enforcing stamp duty payments on employment-related documents under the Stamp Duty Audit Framework, effective Jan 1. Associated Chinese Chambers of Commerce and Industry of Malaysia treasurer-general Datuk Koong Lin Loong said employment contracts should be specifically exempted from stamp duty, similar to what is practised in Singapore and Thailand. 'Employment contracts are a day-to-day matter. This is not a one-off legal document. 'Especially in Malaysia's current situation, where we are already struggling with talent outflow to Singapore and elsewhere, this is not the right time to add another burden,' he said when contacted yesterday. Koong added that the law, enacted in 1949, is 'very outdated' and should be amended before any enforcement framework is applied. While the legal requirement to stamp employment contracts has existed under the Stamp Act 1949, it had not been widely practised until now. Under the Act, employers must stamp all employment contracts – including full-time, part-time, fixed-term and short-term – within 30 days of execution, at a flat rate of RM10 per contract. However, failure to comply can now trigger a late penalty of up to RM100 per instrument, compounding costs for businesses with high staff turnover or a large workforce. 'The exemption would also remove unnecessary bureaucracy from HR departments, which already have more strategic tasks to focus on,' Koong said. In Singapore, even letters of appointment are considered non-dutiable, Koong added. 'We need that kind of business-friendly environment if we want to remain competitive and attract foreign direct investment.' Echoing this, national president of the Small and Medium Enterprises Association Datuk William Ng criticised the abrupt nature of the enforcement. 'There was insufficient notice, engagement or support from authorities. It feels more punitive than developmental,' he said, adding that the costs would go beyond the RM10 per document. 'The automatic late penalty of up to RM100 per contract means businesses with hundreds of employees, including those hired years ago, are facing a significant retrospective burden. 'HR teams must now comb through old contracts, stamp minor amendments and issue backdated documents. This is overwhelming for small teams,' he said. Ng proposed either exempting standard employment contracts or implementing a simplified compliance mechanism such as optional stamping unless required in court or a digital self-declaration model for SMEs. SME Association of Malaysia president Ding Hong Sing said stakeholders should have been consulted first. 'We are already dealing with so much – minimum wage increases, inflation, recruitment challenges. Now this? 'Even if it's a small amount, it adds up fast when you have many staffers. At least inform us before enforcing,' he said. MCA vice-president and Economic and SME Affairs Committee chairman Datuk Lawrence Low also called for an amnesty period to allow employers to stamp past contracts without penalty. He warned that the current approach could disrupt business operations, hinder hiring and even affect salaries. While the stamp duty is legally enforceable under the Act, Low said clearer guidelines and more communication are urgently needed.
The Star
11-05-2025
- Business
- The Star
Experts: Young taxpayers watch out
PETALING JAYA: Young taxpayers often face challenges with tax filing, primarily due to confusion about the necessary forms and failing to keep track of personal tax reliefs, experts say. Associated Chinese Chambers of Commerce and Industry of Malaysia treasurer-general Datuk Koong Lin Loong said first-time taxpayers often face uncertainty regarding the appropriate tax return forms, making the process overwhelming. 'Additional common errors include filing tax returns without leveraging personal tax reliefs, overlooking passive and part-time income, and missing the submission deadline,' he said. ALSO READ: Newbies becoming lost in taxation Koong added that newcomers to tax filing should be well-informed about the personal tax reliefs they qualify for. These reliefs encompass medical expenses for parents, lifestyle purchases such as gadgets, young mother's relief for breastfeeding equipment and early education for young children. Moreover, there are specific reliefs for installing electric vehicle chargers at home. 'The younger generation should also understand the importance of saving and investing wisely to avoid financial pitfalls such as trading in listed companies without proper knowledge of their background and fundamentals. 'Financial planning should also encompass income protection through insurance policies,' he said, adding that accurate tax reporting would provide proof of income for future needs. Accounting firm KPMG's senior tax policy adviser, Dr Veerinderjeet Singh, pointed out that some taxpayers mistakenly claim ineligible personal reliefs. 'Common mistakes arise from a lack of clarity about eligibility, leading some to claim reliefs unjustifiably. 'Typical reliefs are for the Employees Provident Fund and Social Security Organisation contributions, insurance premiums and lifestyle expenses. 'But it's crucial to retain the necessary documentation or receipts, as the Inland Revenue Board may request them during a tax audit,' he said. Meanwhile, Renganathan Kannan, executive director at tax consulting firm Tratax Sdn Bhd, highlighted the significance of tax filing for young Malaysians involved in the gig economy. 'With a global trend of youth engagement in the gig economy, such as becoming Key Opinion Leaders or influencers, Malaysia is no exception. 'Whether this income is primary or supplementary, filing tax returns is essential,' he said. Renganathan advised determining whether the income is from a business source or casual work, as the latter offers limited capital allowance claims on expenses like phones, cameras or air conditioners for home studios. He cautioned about the necessity of timely tax filings to avoid penalties and complications, particularly for business and start-up owners seeking financing. 'Late submission penalties can adversely affect start-ups' profiles, making it challenging to build credibility with stakeholders, government agencies, investors and financial institutions,' he added.
