PETALING JAYA: The new Investment Tax Allowance (ITA) will encourage existing small and medium enterprises (SMEs) that have exhausted their reinvestment allowance eligibility period to increase capacity and investment in high-value activities under the New Industrial Master Plan 2030, said KPMG partner and head of indirect tax Ng Sue Lynn.
She said while the full guidelines have yet to be issued, the eligible rate will be determined using an outcome-based approach.
“SMEs can apply to the Malaysian Investment Development Authority from Jan 1, 2024 to Dec 31, 2028,” she said in a statement.
Furthermore, Ng said ahead of the anticipated e-invoicing requirement, currently pending gazettement, SMEs can enjoy a special deduction of RM50,000 per year of assessment (YA) from YA 2024 to YA 2027 to support its implementation.
“Some existing reliefs are still available, albeit with tightened eligibility.
“These include the start-up tax rebate, concessionary income tax rates, and special capital allowance,” she said in a statement.
Ng, a fellow of the Association of Chartered Certified Accountants (ACCA) also highlighted that micro-credit loans below RM50,000 are exempted from stamp duties.
“Moreover, the digitalisation grant scheme is a recent collaboration between the Malaysia Digital Economy Corporation, Bank Simpanan Nasional, and the Malaysian Communications and Multimedia Commission.
“It offers a 50% matching grant, capped at RM5,000 per entity, to help SMEs with digitalisation,” she said.
To stay updated with the latest taxation requirements, Ng suggested attending regular training sessions, workshops, and seminars organised by the tax authorities such as Lembaga Hasil Dalam Negeri (LHDN), the Royal Malaysian Customs Department and other government agencies, as well as organisations like the ACCA that provide regular update alerts.
“These are the three most important things that SMEs need to do, especially when it comes to filing taxes.
“First, revisit the status of your company to ensure it remains compliant with various regulatory requirements,” she said.
Secondly, she advised ensuring that the company meets the eligibility criteria before claiming any incentives, as most incentives have conditions.
“Third, do not wait until the last minute to get your paperwork in order,” Ng added.
As companies prepare for the eventual transition to e-invoicing, Ng suggested that business owners visit the LHDN portal for a comprehensive look at e-invoicing, which will become mandatory for all by July 1, 2025.
“When equipped with the relevant knowledge, business owners can take the next steps such as educating staff and key stakeholders on the new requirements, and regularly assessing business operations to ensure compliance with the issuing as well as the receipt of invoices,” she said.
With the July 1, 2025 deadline for SMEs, she also advised looking into the company’s enterprise resource planning systems to ensure compatibility with LHDN and the capability of issuing e-invoices.
Source: new-tax-allowance-encourages-smes-to-raise-capacity – FMT
