PUTRAJAYA (Bernama): The government has decided to raise the minimum monthly wage to RM1,200 in major towns under 57 city and municipality councils while the minimum wage remains at RM1,100 a month for the rest of the country, says the Human Resources Ministry.
It said the new minimum wage will take effect from Jan 1, 2020, for all employers and the order would be gazetted soon in line with the decision.
Details on the minimum wage according to hours and days as well as workers paid according to piece rate, trip, commission, tonne and task would be provided under the new minimum wage.
According to a statement from the ministry, this follows the tabling of Budget 2020 and the decision of the Cabinet on Dec 6 on the implementation of the RM1,200 minimum wage per month in major towns.
"The implementation of RM1,200 minimum wage in major towns and RM1,100 per month in other areas, was defined under Section 2 of the Employment Act 1955 (Act 265), Sabah Labour Ordinance and Sarawak Labour Ordinance,” it said.
The ministry said the minimum wage would be applicable to all workers in the private sector except domestic service as stipulated in the Minimum Wages Order 2018.
It said the decision of the government to increase the minimum wage in major towns was to assist workers in these areas to cope with the high cost of living.
Among the cities listed are Johor Bahru, Iskandar Puteri, Alor Setar, Melaka, Penang, Seberang Perai, Ipoh, Shah Alam, Petaling Jaya, Kuala Terengganu, North Kuching, South Kuching, Miri, Kota Kinabalu, Kuala Lumpur, while the major towns are Batu Pahat, Kluang, Kulai, Muar, Segamat, Pasir Gudang, Kulim, Sungai Petani, Langkawi, Kubang Pasu and Kota Bharu.
Also listed are Alor Gajah, Jasin, Hang Tuah Jaya, Seremban, Nilai, Port Dickson, Jempol, Kuantan, Temerloh, Bentong, Manjung, Kuala Kangsar, Taiping, Teluk Intan, Kangar, Ampang Jaya, Kajang, Klang, Selayang, Subang Jaya, Sepang, Kemaman, Dungun, Padawan, Sibu, Kota Samarahan, Bintulu, Sandakan, Tawau, Labuan and Putrajaya.
The ministry said the minimum wage rate would continue to be reviewed to ensure it is in line with current needs and with the objective of achieving a minimum wage of RM1,500 a month in the first five years of Pakatan Harapan’s administration.
Source: The Star
Service Tax Group G Item 8 - Information Technology Services
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Information Technology is the Use of Any Computers, Storage, Networking and Other Physical Devices, Infrastructure and Processes to Create, Process, Store, Secure and Exchange All Forms of Electronic Data
Service Tax on the supply will be charged at the point of services rendered
IT Services Include:
Computing Services;
Coding and Programming;
Application Development;
Software Development;
System Integration;
Web Development;
Platforms;
Networks Integration;
Data Processing and Administration;
Cloud Services;
Artificial Intelligence;
Internet of Things
Taxable IT services:
Provision of software by the software developer;
Services relating to the development, customization or provision of computer system (computer system refers generally to IT equipment and software that works together to perform some specified functions);
Installation or setting up of computer system;
Installation of software into hardware;
Software support and maintenance;
Periodic payments, subscription or maintenance for continued use and updates website related services, (eg development, customization, maintenance of webpage, websites, web portal and online platforms);
Updating to new version, upgrading or modification of data, system or software;
Managed data centre services, (eg managed service, connection charges);
Digital data services delivered through the internet;
Administrativefee for data, system or software;
IT advisory or consultation in relation to data and systems (hardware and/ or software)
Management on IT;
Training services (subject to service tax under Consultancy Services effective 1 January 2019)
Exclude:
Charge on storage or co-location of hardware or server;
Physical security of hardware or server;
Sale and renewalof license for data, system and software by reseller, retailer or distributor of software;
Leasing or rental of computer, hardware and server;
Assembly of computer, hardware or server;
Operatingsystem software embedded in hardware
Effective 01 January 2019, ITS provider granted exemption from payment of service tax on ITS received by him. If:
The service that is exempted is an ITS, not other services received by ITS provider;
ITS provider who is the recipient of such ITS must be a registered person;
The ITS is provided by an ITS provider who is a registered person
Responsibilities of ITS provider under B2B exemption is required to:
Issue invoices with the following additional particulars;
name and address of the customer;
the customer’s service tax registration number;
the customer’s total amount of service tax that are exempted
Declare the Total Value of Exempted Taxable Services (B2B exemption) to be made in column 18 (c) of SST-02 form.
We do provide SST Registration Serice, Accounting Service and SST Reporting Service. Kindly refer to https://www.ycsaccounting.com.sg/our-services/malaysia/accounting for details. Please feel free to contact us at +607 – 225 4911 should you need more clarifications. Or you can just click HERE to contact us.
Budget 2020 (Tax: Personal Tax, Corporate Tax, Sales and Service Tax SST)
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NOTES – BUDGET 2020
This year, the Government has embarked on a comprehensive review and revamp of the existing incentive framework, comprising the Promotion of Investments Act 1986, Special Incentive Package and incentives under the Income Tax Act 1967. This new framework is expected to be ready by 1st January 2021.
Tax Identification Number (TIN)
Beginning January 2021, Malaysians above the age of 18 and corporate entities will be assigned a Tax Identification Number or TIN. In order to implement this initiative, engagement sessions with all stakeholders will commence next year.
Personal Income Tax
Personal Income Tax Rate
To ensure a more progressive personal income tax structure, it is proposed that a new band for taxable income in excess of RM2 million be introduced and taxed at 30%, which is a 2 percentage point increase from the current 28% rate.
Fertility Relief
The income tax relief of up to RM6,000 given on expenses incurred for medical treatment of serious illnesses will be expanded to include expenses incurred on fertility treatment.
Personal Tax Relief - Child
To ease the financial burden of parents who enroll their children in registered nurseries and kindergartens, individual tax relief for fees paid will be increased from RM1,000 to RM2,000.
Women
Women who have stopped working for a year or more, and are between 30 to 50 years old can enjoy the income tax exemption until 2023.
Corporate Tax
SME Tax Rate
The SME with paid-up capital of not more than RM2.5 million, income tax rate for Chargeable Income up to the first RM600,000 is 17%.
Electrical and Electronics (E&E) industry
The Government will also provide tax incentives to further promote high-value added activities in the Electrical and Electronics (E&E) industry to transition into 5G digital economy and Industry 4.0. These incentives include:
First: Income tax exemption up to 10 years to E&E companies investing in selected knowledge-based services
Second: Special Investment Tax Allowance to encourage companies in E&E sector that have exhausted the Reinvestment Allowance to further reinvest in Malaysia.
Automation
In addition, to encourage automation and to increase company’s productivity, it is proposed:
First: Accelerated Capital Allowance and automation equipment capital allowance for manufacturing sector on the first RM2 million and RM4 million incurred on qualifying capital expenditure is extended to the year of assessment 2023
Second: The incentive is also be expanded to include services sector on the first RM2 million incurred on qualifying capital expenditure from the year of assessment 2020 to the year of assessment 2023.
Building Digital Malaysians
To ensure gains arising from successful Digital Companies are shared with the Rakyat, the Government will introduce the concept of Digital Social Responsibility (DSR). DSR is the commitment by businesses, to contribute to digital economic development while improving the digital skills of the future workforce with initiatives such as technology scholarships, training and upskilling for digital skills for communities in need. Contributions towards DSR by the companies will be given tax deduction.
Strengthening Access to Financing for Businesses
To further encourage alternative sources of funding for start-ups companies and to attract more foreign investment to Malaysia, tax incentives given to venture capital and angel investors will be extended until the year 2023.
The current tax deductions on the cost of issuance and additional deduction on sukuk issuance costs under the principle of Wakalah will be extended for 5 years until year of assessment 2025.
To further promote Islamic fund and Sustainable and Responsible Investment (SRI) fund management activity, the tax exemption for fund management companies managing Shariah compliant funds and SRI funds, and the tax deduction on the cost of issuing SRI Sukuk will be extended for another 3 years until year of assessment 2023.
Green Growth and Energy for the Future
The Government intends to attain Malaysia’s goal to generate 20% of our energy consumption from renewable sources by 2025. Green Investment Tax Allowance (GITA) and Green Income tax Exemption (GITE) incentives will be extended to 2023. A 70% income tax exemption of up to 10 years will be given to companies undertaking solar leasing activities.
IP-generated income based on the Modified Nexus Approach (MNA) derived from patents and copyright software will be given tax exemption for a period of up to 10 years.
First: Income tax exemption be given for organisers of approved arts and cultural activities, approved international sports recreational competitions, and conferences organisers
Second: New investments in international theme park projects will be given income tax exemption of 100% of statutory income or Investment Tax Allowance of 100% to be set off against 70% for 5 years
Third: Increasing tax deductions given to companies sponsoring arts, cultural and heritage activities in Malaysia from RM700,00 to RM1,000,000 per year
Fourth: Accelerated Capital Allowance for expenditure incurred on the purchase of new locally assembled excursion bus to be fully claimed within 2 years
Fifth: Excise duty exemption of 50% for locally assembled vehicles be given to tour operators for the purchase of qualified new tourism vehicles.
Apprentice
Government extend double tax deduction on expenses incurred by companies participating in Skim Latihan Dual Nasional (SLDN) for another two years.
The double tax deduction given to companies undertaking Structured Internship Programme (SIP) approved by Talent Corporation Malaysia Berhad (TalentCorp) will be expanded to include students from all academic fields rather than just engineering and technology.
Corporate Social Responsibility (CSR)
To further encourage the private sector to donate as part of their corporate social responsibility, Government will increase the donation reporting threshold to RM20,000 under Income Tax Act 1967 beginning 2020.
Donation
To inculcate philanthropy, tax deduction on donation for charitable and sports activities and projects of national interest will be increased to 10% from the aggregate income for tax payer. The tax deduction is expanded to:
First: Cash wakaf contribution to state religious authorities or a body established by state religious authorities administering wakaf
Second: Cash wakaf contribution to public universities allowed by the state religious authorities to receive wakaf
Third: Cash endowment contribution to public universities
Beginning 2020, tax exemption will be extended to religious institution or organization registered as a Company Limited By Guarantee with Companies Commission of Malaysia.
Real Property Gain Tax
In response to the public view regarding the Real Property Gain Tax (RPGT) imposed on disposal of properties after 5 years onwards, the Government will enhance RPGT treatment by revising the base year for asset acquisition at 1st January 2013 for asset acquired before 1st January 2013 as compared to the previous base year of 1 January 2000.
Sales and Service Tax
Digital Service Tax
Digital Service Tax will be implemented with effect from 1st January 2020, to include services such as, but not limited to downloaded software, music, video or digital advertising. Foreign service providers can commence registration with the Royal Malaysian Customs Department (RMC) as of 1st October 2019.
Training
All training and coaching services provided by training service provider to the disable persons will be exemption from service tax.
CHRISTMAS 2019
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Merry Christmas!!
Please be informed that both of our #Singapore and #Malaysia offices will be closed on the following dates:
25th December 2019 (Singapore & Malaysia - Christmas Day) 1st January 2020 (Singapore & Malaysia - New Year)
Remain SST: Respect Mandate Given by the People
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PUTRAJAYA: The decision to bring back the abolished Goods and Services Tax (GST) will be made by the Pakatan Harapan presidential council, says Lim Guan Eng.
The Finance Minister said until a decision is made, the mandate given by the people who voted for Pakatan, which among others promised to abolish the 6% GST, should be respected.
"Unless there is incontrovertible evidence that this (wanting GST back) is the will of the people, I think we have to respect the mandate given by the people of Malaysia in the last general election," he said after attending the ministry's monthly assembly on Friday (Oct 4).
Lim pointed out that in the last election, it was made very clear that the people rejected the 6% GST.
The Malaysian Institute of Economic Research had suggested that the government reintroduce the GST but at a lower rate of 3% and not the original 6%.
Lim said since GST was abolished last year, the government has managed to curb inflation and cost of living.
"Abolishing GST has its impact. We have one of the lowest inflations in the world at 1.5% last month and we expect not to exceed this for the whole year.
"If you allow GST to come back (at) 6%, then I think we will see inflation going up," he said.
