Back in the tabling of Budget 2024, Prime Minister Datuk Seri Anwar Ibrahim suggested increasing the SST Malaysia from 6% to 8%, capital gains tax imposition and introducing high-value goods levy.
SST Malaysia Increase from 6% to 8%
The increase in the SST rate will apply to chosen services and industries. However, the increase will not be applied to important services like food and beverages as well as telecommunications. But the list of taxable services will be expanded: logistics, brokerage, underwriting and karaoke.
Capital Gains Tax
As from 1 March 2024, a capital gain tax of 10% will be applicable on unlisted share disposal for local companies. Some situations in which the tax could be exempted include share disposal for initial public offering (IPO), inner restructuring and venture capital funds.
High-Value Goods Tax
These will include a high-value goods tax ranging from 5% to 10% on the likes of jewelleries and watches. The tax cost shall however be determined by the value of the same.
Implications for Accounting
Financial Planning: With the rise of SST rate, companies have to rethink their financial scheme and budget. This adaptation involves adjusting pricing strategies, sales forecasting and managing cash properly such as to meet their tax obligations at this revenue level without compromising profitability.
Accounting Software Updates: To ensure running a precise 8% SST accounting of their goods and services, companies must update their accounting software. The current will also assist in the provision of correct financial statements and tax returns. Are you ready to simplify your accountancy and tax process with compliance? Fastlane Group offers efficient bookkeeping services with Xero’s cloud-based accounting platform.
Record Keeping: Maintaining meticulous records is vital. It is important to keep proper records of all the SST transactions. Errors in the records that are inaccurate or incomplete imply costly errors when filing of tax is finally being done.
Implications for Tax Filing
Compliance: Businesses need to meet the changes brought in by the revised SST rate at 8%. Failure to file correct rates could amount to penalties, fines and greater attention by tax authority bodies would also prevail.
Submission Deadlines: The submission of returns in regard to the SST is within specified deadlines in Malaysia. These are the deadlines for businesses to file or they will be required to pay penalties for late filing. One has to be updated on any alterations made regarding the deadline or regulation that might happen.
Input and Output Tax: It is important for one to note between input and output tax. SST charged on business purchases – input tax; SST collected from customers – output tax. These have to be calculated and accounted by businesses.
Tax Incentives and Exemptions: The taxation system in Malaysia provides various concessions under the SST regime (SST offers certain tax incentives, exemptions in Malaysia). Therefore, businesses have various legal means of minimizing taxes that they should explore.
Accounting and tax filing in Malaysia has critical ramifications given that the SST rate skyrocketed to 8%. This calls for businesses and individuals to plan their finances, update software regularly, as well as maintaining appropriate records. Compliance with SST regulations, timely submission of returns and understanding the dynamics of input and output tax are therefore key towards facilitating smooth operations in taxation. Furthermore, the businesses need to investigate possible tax relief and exemptions that would help their taxes.
Fastlane is here to help you wade through these changes and remain tax compliance. Schedule a free consultation with us or contact our specialist today! 💼📞