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What You Need To Know About Vacancy Tax In Malaysia?

vacancy tax
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Vacancy Tax In Malaysia

Housing oversupply and vacant units remain persistent challenges in Malaysia. The concept of a vacancy tax — a levy on unoccupied or unsold properties for a defined period — is gaining traction among policymakers and industry stakeholders as a potential tool to encourage the release or rental of idle stock, curb speculation, and improve housing affordability.

 

Even if you are familiar with the concepts of a vacancy tax in Malaysia, it is highly possible that you might have heard more about it recently because it is being extensively discussed in the news at the moment. It is associated with the oversupply of properties that have a high cost and are not selling due to their unsuitability.

 

Property developers and contractors build buildings to make big profits. Now the Malaysian government is proposing the imposition of a vacancy tax on the unsold buildings of these builders.

What is Vacancy Tax?

A vacancy tax is a tax that is imposed in the shape of a penalty on those properties that are left vacant for a certain period of time. The amount of the vacancy tax is calculated on the basis of the percentage of gross selling of such properties. 

 

In Malaysia’s emerging discussion, the tax could be targeted at developers with unsold high-rise units, or individual owners leaving units idle, although concrete legislation has not yet been finalised.

Importance of Vacancy Tax

The vacancy tax is being formulated by the Housing and Local Government Ministry (KPKT). It is expected to be imposed on developers who fail to sell properties in a few months during the next few years. The purpose of this tax is to minimize the existence of empty residential units in the country.

Moreover, the Ministry is also expecting that the vacancy tax will prompt developers to become more careful and responsible with their projects, especially high-rise and large-scale developments. The introduction of the vacancy tax does not need Parliament’s approval as it can be implemented without amending the Act.
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Criticism of Vacancy Tax

The announcement of the vacancy tax has resulted in severe criticism. Some economic experts and leaders of the real estate industry have criticized the authorities because such a tax could discourage investors and developers from developing new structures.

 

In this regard, certain developers have turned to accounting and audit firms in Malaysia to assess the possible taxes they might have to pay if the vacancy tax is successfully imposed on their unsold properties.

 

The basic demand of the developers is that the owners of these properties should have complete freedom over various matters associated with properties and construction. There are also some serious concerns that the imposition of a vacancy tax will set a precedent of administrative interference in the internal matters of a particular industry like the property industry.

 

Property and legal experts have also highlighted the fact that the Local Government Act provides tax incentives to vacant properties. On the other hand, a vacancy tax would disturb future projects in Malaysia.  It is seen to be an undesirable time for such a move because the country is still recovering from the impacts of COVID-19 on the economy.

 

Another common criticism of the vacancy tax is that it will negatively impact property markets because they will be forced to reduce the rent in markets where properties are oversupplied. Moreover, it is important to note that monitoring vacant properties all over the country is quite challenging; the implementation of the tax will be difficult.

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Government Response

The Malaysian government has promised to consider all factors before imposing any kind of vacancy. Government authorities will thoroughly study the proposal of imposing a vacancy tax. Moreover, the efficiency of this tax is often defended using the fact that similar taxes are applied in Canada and Australia.

The government has also assured the developers that any such action of imposing a vacancy tax will be taken after discussions with the financial institutions like Finance Ministry, Bank Negara Malaysia and other regulatory authorities. Similarly, Kuala Lumpur City Hall is also considering the demands and complaints of the developers and issuing proper planning approvals for sustainable development in the city.

The proponents of the vacancy tax consider it to be essential because a lot of housing units are taking much more than just a year to fill. As a result, an excess of vacant residential properties is being created.

Why Now? The Case in Malaysia

  • As of mid-2024, there were at least 22,642 completed units that remained unsold for over nine months, with a combined value of RM14.24 billion.

  • The mismatch between housing supply and demand is evident: Malaysia’s price-to-income ratio reached 9.78 in 2022 — significantly higher than the global benchmark of around 3.0 — indicating homeownership remains out of reach for many. 

  • These factors are driving discussion of policy reforms including the vacancy tax as part of a broader strategy to boost housing utilisation and affordability.

Current Regulatory Status (2025 update)

To date, the tax remains proposed and under study. The Khazanah Research Institute in 2023 flagged the need for a vacancy tax to address overhang and vacant units in Malaysia.


No federal legislation or regulation has yet been enacted. Policymakers and stakeholders continue to debate design, scope and implementation frameworks.

Key Features Being Considered

Although not yet formally adopted, the following design elements are under discussion:

  • Tax applies to units left vacant, unsold or unrented beyond a set period (e.g., 6–12 months).

  • Calculation basis may be % of value or sale price of the unit. 

  • Focus may be on higher-priced units or speculative investment stock (e.g., units priced above RM500,000) where overhang is pronounced.

Implications for Developers & Investors

  • For developers with unsold or slow-moving inventory, the tax could increase holding costs, incentivising quicker sales or leasing.

  • For investors holding idle properties, the tax may alter investment return assumptions (e.g., rental yield, capital appreciation).

  • It could shift strategic decisions: prioritising occupancy, rental market entry, or earlier divestment rather than speculative holding.

Pros & Cons

Pros:

  • Helps unlock idle housing stock and increase supply for renters/buyers.

  • Discourages speculation and hoarding of units.

  • May prompt developers to align build-out with demand more accurately.

Cons:

  • Implementation and monitoring of vacancy status nationwide is complex and resource-intensive. 

  • Risk of downward pressure on property values if large portfolios are sold or released rapidly.

  • The tax may discourage some investment or development activity, depending on design and thresholds.

What Should You Do Now?

  • Monitor policy announcements from Ministry of Housing and Local Government (KPKT) and state/local authorities for updates on vacancy tax design and timeline.

  • For developers/investors: Review unsold inventory figures, rental occupation rates and holding costs.

  • Conduct scenario modelling: Assess impact of a vacancy tax on your project’s cash-flow and profitability.

  • Engage advisors early: Tax, legal and property planning specialists can support strategy and compliance planning.

FAQs About Vacancy Tax in Malaysia

When will the vacancy tax become law?

As of November 2025, the tax has not been legislated. It remains under study by policy-makers.

Design details are still pending, but commentary suggests targeting unsold high-rise, investment-grade units.

Under discussion – some reference 6 months or more for being considered “idle”.

Likely yes – as occupancy or active leasing may mitigate the vacancy designation, but official rules are not yet confirmed.

In a Nutshell

Overall, one could say that the debate about the vacancy tax is far from over. The matter is expected to continually evolve in the next few months as the government has taken up the proposal to study it extensively and assess its feasibility.

 

Depending on the results of such a study, a final decision will be made about whether the vacancy tax is to be imposed on property developers or not.

 

For more information, feel free to get in touch with us.

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What is the difference between Human Resources and Payroll?

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Business meeting. High angle view.

Difference between Human Resources and Payroll

Some people and even organizations make the mistake of considering human resources and payroll to be similar things. However, they are two different areas of a business. Payroll deals with compensating employees while human resources means taking care of employee relations.

 

Both payroll and HR services have distinct roles in a company but they also share some functions that allow smooth and efficient functioning of an organization.

 

The integration of payroll and HR services, with the help of audit firms in Malaysia, allows companies to enhance the efficiency of the business, increase productivity and minimize the issues associated with producing consolidated reports.

 

These two departments of a company overlap in certain situations; for example when an employee is fired or recruited, when increasing the compensation package of an employee or when the company is going to grant leave to an employee.

The Role of Payroll in a Company

Payroll is the process through which the employees of a company receive their salary. Payroll services and functions include balancing and maintenance thorough payroll data, depositing salaries and reporting taxes. Payroll services also include dealing with wage deduction, creating and maintaining records and authenticating financial data.

 

Every organization should hire a reliable payroll management company or an accounting firm in Malaysia that can manage such services and ensure the proper distribution of payroll checks, making sure that the company is in compliance with tax laws and maintaining records of old and new employees.

 

Such accounting and audit firms in Malaysia are not only responsible for calculating the salary and wages of employees, but also for adding overtime, holiday and bonuses when required.

difference between Human Resources and Payroll-1

The Role of Human Resources in a Company

It is the responsibility of the HR department to manage the staff of a company. This type of management can happen in different ways. For instance, hiring the right kind of person for a company and making sure that all of the employees are working for the benefit of a business. Once new employees have joined the company, the HR professional has to ensure that they are delivering as per expectations.

The HR department also has to increase the motivation of employees and reward them by providing different bonuses like paid holiday or incremental increases in salary after a certain period of time.

Common Things Between HR and Payroll Departments

Both HR and payroll services are important to make sure your business is running smoothly. For instance, if an HR department has decided to fire an employee, it must inform the payroll management team to ensure proper paperwork can be produced for his or her release from the contract.

Similarly, in the case of bonuses or an increase in salary packages, the HR department will forward suitable documents to payroll for the calculation of the payment that has to be paid to employees. Other balances like a vacation, sick days and paid or unpaid leaves are tracked by both HR and payroll.

If your company is getting HR and payroll services from an accounting firm in Malaysia, it is important for you to include them in any strategic planning about your business. All departments must work together for the benefit of the business and make sure that they are able to achieve set goals.
difference between Human Resources and Payroll-2

One way of understanding the significance of HR and payroll services in planning is that the HR department is familiar with the professional strategies for hiring the best talent for your business and they know how to implement the suitable rules and regulations that promote an efficient and productive workplace.

 

Similarly, payroll is important for finding the best solutions to maximize the security and efficiency of payroll systems. Audit and accounting firms in Malaysia are well-equipped to provide payroll services, along with efficient auditing systems that minimize the risk of fraud and malpractices in paying employees.

 

Such modern practices and payroll systems also allow your company to pay employees on time so you will not have to face any legal issues due to late payments.

In a Nutshell

It is evident that both the human resources department and payroll services are essential for any type and scale of business. HR professionals make sure that suitable people are joining the company while payroll services are associated with paying your staff correctly and on time.


Most businesses, especially small-scale companies, can enjoy massive benefits by outsourcing their payroll and HR services to a third-party accounting and audit firm in Malaysia. Such firms have the required skills and knowledge needed to provide the best payroll and HR services for your business.


For more information, feel free to get in touch with us.

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Service Tax Measures for COVID-19 in Malaysia

Service Tax Measures
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Service Tax Measures for COVID-19 in Malaysia

To help and support businesses through this difficult and uncertain economic period, the government of Malaysia, as well as many other countries around the world, has introduced a massive number of tax incentives. However, the recently introduced tax schemes can make it quite challenging and confusing; thus, in this article, you will learn about every major tax incentive in Malaysia. 

 

The purpose of this article is to help Malaysian companies get up-to-date information about taxation policies and develop an effective COVID-19 response strategy. Companies that are relying on different accounting services in Malaysia should also be familiar with these incentives to ensure they are getting suitable services and avoiding as much taxation as possible.

 

A timeline of the service tax measures for COVID-19 in Malaysia is as follows:

  • On 30th March, the government announced several service tax incentives in Malaysia to help businesses during the coronavirus outbreak. As a result of such measures, taxes on hotel services were cut from 6% to zero. A similar incentive was provided to selling tobacco and alcohol in hotels until 31st August 2020.
  • On 16th April, the deadline for the sale and service tax was extended from March to 12th May.
  • On 1st May, due to the pandemic and worsening economic conditions, the deadline for the service tax for the months of February and March was extended. Moreover, tax incentives were announced for the tourism industry.
  • On 2nd June, the government again postponed the date of sales tax submission until 30th June. Moreover, the penalties or interest on late submission was completely removed.
  • On 2nd July, the Malaysian government announced multiple service tax incentives for the tourism industry. Moreover, the tax payment instalments were delayed to 31st December. It was also announced that the tourism tax will be zero from 1st July 2020 to 30th June 2021. The 30th March decision of reducing tax on hotels and accommodation services was also extended till 30th June 2021.
Service Tax Measures-2
Generally, value-added tax and services measures have the following attributes:
  • Variations in time to submit taxes for different industries.
  • Specific helplines to get quick answers to inquiries.
  • An efficient system of automatically delayed remittances to give companies a much-needed cash flow boost. Remittances have taken a hit during the pandemic, and such efforts are made to support them.
  • An exemption on the Tourism Tax — the previous rate was 6%, and it was reduced to 0% to support the economy amid the pandemic.
  • Waving the interest on late payments.
  • Reducing interest rates.
  • Providing tax incentives for firms that provide essential services, like accounting services in Malaysia. 
  • Quick and automatic waivers on the fee for late submission of various taxes such as the Sales and Service Tax (SST) as announced by the Malaysian government.
The government also announced several measures for customs duty such as:
  • Hiring more custom officers to maintain a smooth supply chain and prevent massive disruptions caused by the global pandemic.
  • Reviewing policies, like allowing the export of surgical masks, ventilators and raw materials for PPE.
  • Wavering late fees for paying bills.
  • Establishing specific help desks to make the import-export process smooth and easy.

PENJANA

The Malaysian government also announced several economic relief packages to support different industries of the country. Announced in June, the National Economic Recovery Plan (PENJANA) – a comprehensive package viewed by the experts as a leading plan to recover the economy and uplift the economy – promises massive benefits, financial assistance and tax incentives in Malaysia. The service industry got unprecedented benefits under this plan.

Service Tax Measures-3

In a Nutshell

Overall, the response of the Malaysian government to the COVID-19 pandemic has been quite positive and much appreciated. Financial institutions are still trying their best to come up with the best strategies and financial measures that will help businesses in the post-pandemic world.


Furthermore, many industries will be enjoying the tax incentives until 2021, which gives organizations plenty of time to recover their business without worrying about heavy taxes. Companies that rely on professional accounting services in Malaysia have a great chance of getting through this crisis as soon as possible because efficient accounting and record keeping ensure availability of all essential decision-making data.


Moreover, having a complete picture of financial condition will help you in applying for suitable tax incentives in Malaysia and get some sort of tax exemption or relief to focus on rebuilding your business.


For more information, feel free to get in touch with us.

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Adapting Your Business to a New, Post COVID-19 World

Adapting Your Business Post COVID-19
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Adapting Your Business to a New, Post COVID-19 World

A lot has been said and written about the COVID-19 pandemic and the severe effects the lockdown has had on business in Malaysia. This is the perfect time for companies to adapt their business models to the new normal in the post-COVID-19 period to ensure maximum business recovery and survive this economic crisis. Relying on accounting firms in Malaysia will also provide a much-needed, objective outlook on your business and financial condition.

 

While short-term strategies for business recovery are significant, business owners also have to realize that they must redevelop their working procedures and business model to adapt to the new conditions in the post-pandemic world. Long-term planning and strategies will make your business thrive in these unprecedented times.

 

Here are the top five strategies that you should implement to adapt your business to the new normal:

1. Implement Cloud Solutions

Cloud computing has been an important part of organizations for many years now. However, the pandemic has highlighted the importance of modern cloud solutions. Virtual and remote working are essential parts of the new business models, so you must consider implementing modern cloud solutions in your business to start enjoying the massive benefits provided by cloud technology. It will provide scalability, reliability and efficiency in your new business procedures.

2. Establish New Sales Channels

The COVID-19 pandemic has greatly disrupted the traditional sales channels of almost all types of businesses, especially small companies. Now, organizations should start researching various sales channels. Many companies have already moved to online platforms, like e-commerce stores and social media platforms, to keep their business afloat during the pandemic.

In the post-COVID-19 world, you should not abandon such channels. Instead, allocate an appropriate portion of your budget to digital marketing and developing other sales channels. It will ensure that your business is able to smoothly function – even if it is closed physically.
Adapting Your Business Post COVID-19-1

3. Reduce Physical Assets

Many accounting firms in Malaysia provide professional accounting services. You should consider availing them to revaluate your entire business model. Technology has been an essential part of business for many years now, but the pandemic has accelerated this process.

 

You should expect rapid digitalization in various industries; thus, try to minimize the physical assets in your value chain – as much as you can. Moreover, you will realize that using modern tools and technology will improve the entire company and enhance the capabilities of your business.

 

For instance, you will be able to get reliable accounting services in Malaysia through digital channels, such as using suitable software for better finance management and budgeting. Ultimately, it will be useful in adapting to the new normal of business that is highly dictated by the digital age.

4. Reset Your Supply Chain

It is easier said than done, but if the COVID-19 pandemic has disrupted the supply chain of your business, then you must re-configure it. You should remember that even if the lockdown is over, the pandemic is still affecting a lot of countries and people all over the world. The only way to move forward is by adapting to evolving situations.

The coronavirus pandemic has exposed the vulnerabilities of the global supply chain. For this reason, it is imperative that your business devise suitable strategies that will help optimize the business procedures for your company. One common approach that you can use to avoid further disturbance in the supply chain is to use a flexible and networked ecosystem instead of a linear supply-chain model.

The flexibility and resilience of supply chains are significant to help a business recover as well as prevent further losses in the future. Using technology in the global supply chain has also become more important than ever. Automation, machine learning, AI and using tools to predict future trends are becoming essential in the post-COVID world to help organizations adapt to new settings.
Adapting Your Business Post COVID-19-2

In a Nutshell

All of the above strategies are highly useful in adapting your business to the new working procedures and demands after the pandemic. There are many other measures that you can take to help your business survive in the post-pandemic period. These methods will only be useful when you are fully ready to embrace the change in your business and accept the fact that you might have to completely transform your business to adapt to the new world.

 

When making such important decisions, you should definitely consider using the accounting services of experienced and reliable accounting firms in Malaysia. Such firms are fully equipped with the right skills and technology needed to be able to evaluate business conditions and suggest changes. This will depend upon the analysis and data collected by these companies about the industry and specific businesses.

 

For more information, feel free to get in touch with us. 

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Seven Business Valuation Methods You Should Know

Business Valuation Methods
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Seven Business Valuation Methods You Should Know

Business valuation is the process through which you can determine the economic value of your business or an organization. There are various circumstances when business valuation becomes essential. For instance, you might be interested in selling your company for taxation purposes. Being familiar with the value of your business is important so you can make a smart decision about your company.

 

Owners and managers of companies in Malaysia usually make use of professional business valuation services to get an objective estimate of the worth of their business. This information is also important in negotiations with shareholders and potential investors.

 

There are numerous ways of evaluating the value of a business. Generally, all of these methods produce a comprehensive and objective report of your company’s value. The following are the top seven business valuation methods used in Malaysia:

1. Market Value Valuation

The market value business valuation method is a subjective method of measuring a company’s value. The primary step involved in such a method is comparing the value of your company with similar businesses that have been sold.

This type of business valuation method is only feasible for those businesses that are able to access comprehensive records of their competitors. However, it is not suitable for sole proprietors because it is very challenging to obtain data about such competitive businesses. Furthermore, there is a very high chance of incorrect or imprecise calculations using the market value valuation method.

Therefore businesses can only rely on this method if they are confident that they will be able to negotiate the final value if they are looking for investors or buyers. Otherwise, another business valuation method should be used.

2. Asset-Based Valuation

Asset-based valuation is an efficient business valuation method used in Malaysia. It involves finding out the company’s total net asset value and subtracting the value of its liabilities. Businesses that are going to continue operating should use the going-concern method to evaluate the company’s value.

 

On the other hand, companies that are going to shut down or are operating with the assumption that the business will be finished in the near future should implement the liquidation value asset-based valuation. In such a scenario, the value is determined based on the net cash that the owners will have in cases of business termination.

 

You should remember that using the liquation-based valuation approach means the value of the company’s assets is likely to be lowered due to differences in market value.

Business Valuation Methods-1

3. ROI-Based Valuation

As the name suggests, an ROI-based valuation method determines the value of a business depending on the profits and the type of return on investment an investor is going to receive by purchasing or investing in your company.

It is a very useful business valuation method being used in Malaysia, especially from the investors’ perspective. They get all the essential information about potential ROI before investing in a company. However, ROI tends to fluctuate a lot due to evolving market conditions which make the ROI-based valuation method extremely subjective.

4. Discounted Cash Flow Valuation

The three business valuation methods discussed above are the most common ones in Malaysia. However, other methods like DCF valuation are also used. It is also called the income approach valuation because it involves evaluating a company’s value based on its projected cash flow. It is a very useful valuation method, especially when you are not expecting a huge rise in your profits anytime soon.

5. Capitalization of Earnings Valuation

The capitalization of earnings valuation method is like an extension of the DCF valuation method. It involves calculating the business’s value based on its cash flow, annual ROI, projected profits and value. It is suitable for stable companies that are not expecting many fluctuations in their overall finances.

6. Multiples of Earnings Valuation

A business’s potential to generate revenue in the future is the basis of the multiple of earnings valuation method. In this method, a multiplier is assigned to the current revenue to calculate the overall worth of the company. The multiplier is decided on the basis of the company’s projected profits, industry situations and other such factors. It is not commonly used because the reliability of the value evaluated through this method can greatly decrease due to a number of factors.

Business Valuation Methods-2

7. Book Value Valuation

Book value is another business valuation method used by some organizations in Malaysia. It involves calculating the value of a company by looking at the balance sheet of a company. A balance sheet contains all of the essential information about the value of the equity, total assets and liabilities that are critical to evaluating the right value of a business.

The book value valuation method is beneficial for businesses that have low profits, but a large number of valuable assets.

In a Nutshell

These are the most popular business valuation methods around the world, including Malaysia. You should remember the fact that business valuation is a complicated process and every organization must determine the most suitable valuation method, depending on the scale of the business and the industry in which it is operating.

 

It is not necessary to use just one option. Instead, using multiple valuation techniques and combining the results allows companies to get reliable and accurate results.

 

For more information, feel free to get in touch with us.

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How Does Comparable Valuation Work?

Comparable Valuation
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How Does Comparable Valuation Work?

Comparable valuation is a type of business valuation. It allows companies to evaluate the worth of a company by comparing its valuation multiples to those of its competitors. Valuation multiples are affected by several different factors – generally, the multiples are ratios of numerous valuation metrics, such as equity market or capitalization, or financial metrics, like earnings per share or sales.

 

The basic concept of comparable valuation revolves around comparing the company with its competitors because it is only logical that organizations with identical attributes should trade at similar values. However, this type of business valuation technique is only used by those companies in Malaysia that are capable of gathering enough data about their competitors.

The Importance of Using Comparable Valuation

If you have the required data from your competitors, then the comparable valuation is quite an easy method of business valuation used by many accounting firms in Malaysia. Furthermore, if the markets are steady and providing good securities of other companies, you can rely on comparable valuation to get an accurate valuation range.

 

On the other hand, other business valuation techniques, like discounted cash flow, are affected by many other factors that make comparable valuation much more reliable.

 

Comparable valuation has applications in various industries. Accounting firms in Malaysia prefer this type of business valuation in many situations because it is a highly respected technique among market analysts, investment bankers and other equity investors.

How to Perform Comparable Valuation

There are three main steps involved in performing comparable valuation for reliable and efficient results:

1. Validate the Peer Data

Selecting an appropriate dataset is of utmost importance in comparable valuation. The entire process depends on choosing a suitable company(s) with which you will be making comparisons. Some organizations might choose to compare their business with companies from two different industries. It all depends on the nature and scale of your business.

Whatever your requirements or type of business, you must properly research your peers before selecting suitable companies and move on to the second step to validate the basic metrics chosen for the comparisons.
Comparable Valuation-1

2. Confirm Basic Metrics

There are different types of comparable valuation that have emerged due to the technicalities of different types of businesses. As a result, it is the responsibility of the accounting firm that you are using in Malaysia to select and confirm appropriate metrics for comparable valuation.

Analysts can choose trailing performance metrics or future performance metrics that are derived on the basis of projections. Depending on what kind of data you have about your own company (as well as your peers), both of these metrics are useful for an efficient comparable valuation process.

Generally, future metrics are preferred by a significant number of analysts and accounting firms in Malaysia. However, such metrics must be dealt with very carefully and confirmed at every step of the process to ensure there are no serious errors.

 

Uncertain market situations can disrupt the entire process because the future projections will prove to be inaccurate; hence, the end result will be wrong as well. However, it can be avoided by keeping the metrics up-to-date.

3. Choose Suitable Multiples

Several adjustments have to be made during the comparable valuation of an organization. Such changes might be in the form of one-time changes or modifying the cost of non-recurring assets, like legal expenses, restructuring fees and selling assets. Every company must use up-to-date facts and figures to ensure their metrics and multiples are not off. All of these factors will be highly beneficial in producing an accurate range value of your company.

If the business valuation is being carried out by comparing the company with different organizations in Malaysia, then choosing the right multiples can become quite challenging. In fact, in such situations, many experts suggest shifting towards any other type of business valuation. The goal of business valuation is to determine the worth of a company.

 

In cases where the comparable valuation is not able to produce appropriate results, accounting firms in Malaysia can choose to use other valuation techniques, along with comparable valuation, to get a precise value of the company.

Comparable Valuation-2

In a Nutshell

Despite some of its disadvantages, comparable valuation has managed to remain a popular type of business valuation in Malaysia because it is easy to calculate a company’s value through comparisons when a large amount of data is available.


All you have to do is select suitable peer data, calculate the market capitalization and value and find out the projected finances of the company. Finally, you can obtain the company’s value by applying suitable metrics and making smart comparisons.


For more information, feel free to get in touch with us.

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What Businesses Need To Know About The PENJANA Tax Incentives

Penjana tax incentives-2
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What Businesses Need To Know About The PENJANA Tax Incentives?

Malaysia has introduced its fourth economic relief package to mitigate the impact of the COVID-19 pandemic on the economy, and to provide various tax incentives in Malaysia. The package is named Pelan Jana Semula Ekonomi Negara (PENJANA). Its value is around RM 35 billion.

 

The package includes a number of tax incentives for businesses affected by both the pandemic and the lockdown. It also provides both financial assistance for SMEs and measures to protect the job. Through PENJANA, most of the Malaysians will be able to enjoy tax reliefs as they will not have to pay taxes on some specific expenses.

This article discusses the tax incentives and reliefs given to various individuals and organizations under PENJANA. Here are the top five exemptions given under PENJANA:

1. Incentives for Property Owners

PENJANA provides massive tax deductions to property owners that reduce the rental amount to at least 30%. Such a measure supports not only longstanding property owners, but also the people who are looking to buy property for the first time.

 

The PENJANA plan will also reintroduce and promote the Home Ownership Campaign. It will be useful in kick-starting the property market after COVID-19, which is highly important considering the fact that real estate has suffered a lot in the last few months.

Moreover, stamp duty exemptions are offered to homeowners. Stamp duty is a fee that is typically required for legal documents like instruments of transfer, loan agreements, and other such documentation. The properties that value above RM 1 million will get stamp duty exemptions. 

 

Ultimately, the businesses involved in the real estate industry will also enjoy these benefits, because they will kick-start the property market. Hence, real estate businesses will be able to sell more properties.

Penjana tax incentives

2. Tax Exemption for Automotive Industry

The automotive industry has received a 100% tax exemption for both local and imported cars. It simply means that vehicle manufacturers will not have to pay a single-stage tax on local or international manufacturing. Moreover, the buyers in Malaysia will also benefit from these tax incentives because their costs will come down, due to fewer taxes.

3. Small and Medium-Sized Enterprises (SMEs)

Tax specialists and accounting firms in Malaysia have lauded PENJANA because it covers almost all industries and aspects of the Malaysian economy. Micro businesses and SMEs are considered to be the backbone of the Malaysian economy, as they represent around 98% of Malaysia’s business population.

 

PENJANA pays special attention to SMEs to uplift and heal the economy. Incentives like establishing new companies, income tax rebate of RM 20,000 per annum for the first three years, and stamp duty exemptions are introduced to support this important sector.

 

To facilitate the SMEs’ cash flow issues, the banking sector will be providing about RM 2 billion at a low-interest rate of 3.5%. A criterion is set, and the eligible SMEs can apply for a maximum amount of RM 500,000.

4. Tax Incentives For Enterprises in Malaysia

Large organizations and enterprises were also heavily affected by prolonged lockdown and a smaller number of customers. Hence, PENJANA is promising up to RM 400 million for enterprises with an interest rate of 3.5%.

 

The companies that are eligible for this incentive can apply for up to RM 50,000. Accounting firms in Malaysia will have to keep these incentives and new regulations in mind before managing various companies’ payroll.

Penjana tax incentives-1

5. Tourism Industry

The tourism industry has taken a huge hit due to COVID-19 pandemic and global travel restrictions. PENJANA includes several proposals to help the tourism industry and boost the economy. Some of these measures are:
  1. Extending the tax deadlines until December 31st for the tourism and travel agencies, hotels, and airlines.
  2. Domestic travellers are given concessions as well, because they will not have to pay an income tax of up to RM 1,000 if they are travelling locally between 1st March to 31st December 2021.
  3. Moreover, 100% tourism tax exemption will be given from 1st July 2020 to 30th June 2021. It includes many different exemptions, such as exemption from paying tax for accommodation.

In a Nutshell

Other than the industries discussed above, many other businesses are also given tax exemptions and relief under the PENJANA plan. Newly established businesses and COVID-19 related products like PPEs, thermal scanners, masks, and others are given maximum tax relief.


Overall, PENJANA is a very comprehensive economic package that includes a lot of provisions to support various industries and therefore the Malaysian economy. Every business and accounting firm in Malaysia should familiarize itself with these provisions to ensure that they are able to take benefits from these tax incentives.


For more information, feel free to get in touch with us.

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Payroll Liabilities Are Rare

payroll liability

Payroll Liabilities Are Rare

Various types of liabilities can occur in large-scale businesses and enterprises. Most of the liabilities are associated with payroll, especially in large organizations. Even if payroll liabilities are rare in your organization, you cannot neglect them because it will disgruntle employees and damage your business’s overall reputation.

 

Moreover, you and your company can be held accountable for violating payroll rules and regulations. If you want to avoid such issues and run a successful company without liabilities, keep reading this article as it discusses all the important aspects of payroll liabilities and why every company and accounting firm in Malaysia must consider them during the payroll process.

What are Payroll Liabilities?

Payroll liabilities are the payments associated with a payroll that a company owes but has not yet paid. It includes various types of payments, such as wages for the total number of hours an employee might have worked but have not yet received the payment for. Withheld taxes and other types of payroll costs are also included in payroll liabilities.

In most of the organizations, the vast majority of factors do not remain as payroll liabilities for an extended period of time. For example, if your company pays its employees once a month, the liability will not remain for a long time. Similarly, most of the companies set a certain taxation period, which will result in the removal of withheld taxes from the list of payroll liabilities.

Types of Payroll Liabilities

It is the responsibility of every employer to be familiar with the various types of payroll liabilities. They must be taken into account while budgeting to ensure your company does not run out of funds.

 

Moreover, once you clearly know the amount of money you must pay at a future date, an accounting firm in Malaysia will help you throughout the payroll accounting process and provide reliable HR services.

 

Here are the three main types of payroll liabilities:

1. Wages

The whole purpose of payroll is to pay your employees, which makes employee wages the most common type of payroll liability. The amount of money that you owe to your employees will be considered a payroll liability as long as you have not paid it to your workers.

payroll

2. Taxes

Taxes are a critical part of any payroll system. Accounting firms in Malaysia are familiar with the standard practices and regulations, which helps them in conducting smooth payroll accounting. Various types of taxes, like the state and income tax and other state-related taxes, are withheld by employers. They are considered payroll tax liabilities until you deposit them.

3. Services

Most businesses in Malaysia, especially large-organizations, have to hire an independent accounting firm for payroll and other HR services. The amount of money you have to pay for the accounting firm’s services and software is considered a liability until you pay it. Typically, accounting firms in Malaysia charge on a monthly basis.

There can be many other types of payroll liabilities depending on the company’s location, number of employees, and sector. Some companies have to handle employees’ health insurance and retirement funds as well, which are considered liabilities.

 

Businesses and accounting firms should always be familiar with the latest guidelines, as they are continually changing. Doing so will help avoid any issues and clear all of the payroll liabilities according to the rules and regulations laid out by the law.

Managing & Paying liabilities

If your company has a lot of employees, it can become quite challenging to keep track of the liabilities. It is not possible without an efficient and reliable payroll system. If your company is facing issues in payroll management, you should consider the HR services of an experienced and qualified accounting firm in Malaysia.

Independent firms can help you in better management of your payroll by creating and maintaining comprehensive records. It is important to ensure that your company is paying the payroll liabilities to the correct recipients. Wages are obviously paid to the employees, while taxes are given to the relevant taxation authorities.
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In a Nutshell

Overall, managing payroll liabilities should not be a major issue for any organization. If businesses use a smart, efficient and organized method of payroll accounting, they will start enjoying massive benefits of better management and very few liabilities.


Other than using an effective payroll system, companies should also consider having a considerable amount of cash reserves to cover liabilities in case of a financial crisis. Setting proper reminders, making schedules to pay the liabilities and maintaining thorough records are some of the many ways to facilitate HR services in a company and help avoid payroll liabilities for a long time.


For more information, feel free to get in touch with us.

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Essential Accounting Update Post Covid-19 Lockdown

essential accounting updates

Essential Accounting Update Post Covid-19 Lockdown

Hiring an accounting firm in Malaysia is now more important than ever due to the severe uncertainties created by the COVID-19 pandemic. Many companies, particularly SMEs, have often underestimated the importance of experienced accountants and efficient accounting mechanisms as they are considered expensive.

 

However, the pandemic and subsequent economic crisis have enhanced the importance of accounting services in Malaysia, and this is the best time for all kinds of organizations to avail themselves of these services and develop post-COVID-19 lockdown strategies to recover their business.

 

An accounting firm can help you with better management and allocation of resources. Here are the top 5 reasons why good accounting services are essential after the lockdown:

1. Economic Relief Packages

Since the start of the COVID-19 pandemic, the Malaysian government has issued several economic relief packages. Moreover, the taxation guidelines are continually changing due to various exemptions and tax incentives given by economic stimulus packages like PENJANA.

 

It is hard for the organization to keep up with these evolving guidelines and ensure that they are using all of the government’s benefits. An experienced and qualified accountant will be aware of the entire application process and the best scheme suitable for your business.

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2. Future Strategies

While creating and maintaining records is an essential part of any accountant’s responsibilities, it is not their only job. They help you in making plans and business strategies for the future. 

 

Needless to say, companies that have comprehensive financial plans and mechanisms in place to deal with different kinds of crises are better able to go through a difficult period with fewer damages. If you hire an accounting firm, it will help you make smart strategies for your business’s success.

3. Budgeting

Whether you are running an SME or large enterprise, you must spend a considerable amount of time and energy in budgeting. Proper allocation of the finances and other resources is critical for the success and sustainable growth of any business.

 

Accounting firms provide a variety of accounting services in Malaysia, which also includes budgeting. After the COVID-19 lockdown, you will have to reevaluate your entire budget to ensure your company can function properly, even if you have suffered massive financial losses and have limited cash flow.

4. Better Working Procedures

Poor financial management and having too many business decisions to make on a daily basis can result in poor performance of the company and reduce revenue. On the other hand, a company that utilizes accounting services and maintains it’s working procedures up to the highest standards are better equipped to deal with all kinds of financial issues.

The COVID-19 pandemic and the lockdown have certainly given a huge shock to the global economy and disrupted the majority of the companies’ working procedures. When an accounting firm is managing your finances and business procedures, there is a very good chance that your business will suffer fewer consequences and recover your finances quickly by relying on the advice of professional accountants.
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5. Explore Opportunities

When you are running a business, you have to manage all of the departments of an organization and take a lot of strategic decisions daily. In such a stressful situation, it is quite understandable that you will not have the time to explore numerous business growth opportunities. For example, most industries are still suffering due to the pandemic and economic uncertainty, while the medical and pharmaceutical industry is enjoying a huge boost. There are a lot of business opportunities cropping up in the health industry.

Accounting firms in Malaysia have experts who are familiar with the condition that different industries are in and will be able to evaluate such opportunities, develop business plans, and ensure that you have sufficient capital to invest. In short, you can quickly obtain fully researched and developed business plans for further expansion. After the COVID-19 lockdown, you will need such strategies to support your business and explore other ways of generating income for your business.

In a Nutshell

These are some of the many reasons why you should avail of independent, experienced, and professional accounting services in Malaysia. Accounting firms and chartered accountants are capable of handling many types of financial problems.


In fact, it often happens that a business is facing issues related to financial statements, payroll accounting, and other HR services, and does not realize that a good accountant can easily solve these problems. So if your business has taken a hit due to the lockdown and you are looking for ways to quickly recover, you should definitely consider hiring an accounting firm.


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Why is payroll accounting an important part of your organization?

payroll accounting
close up man hand press on calculator counting calculating about monthly expense from debt bill at the table in home office and managing payroll,money risk financial concept

Why is payroll accounting an important part of your organization

It should go without saying that every company that has employees must have payroll, whether it is a small company or a large international corporation. The payroll process is not completed without efficient accounting practices. In fact, if a mediocre payroll system is put in place to just fulfil regulations, it will ultimately damage the company irreversibly.

More than 50% of the company’s revenue is allocated for employee compensation and benefits. Such statistics are more prevalent in large organizations that have a high number of employees. The non-manufacturing sector, especially, spends a lot of capital on human resources and HR services. Therefore, it is important to develop and implement reliable and stable accounting procedures.

What is Payroll Accounting?

Payroll accounting involves calculating and distributing compensation for the organization employees. Most small and family-owned businesses are able to manage their payroll and accounting requirements on their own. However, large local organizations use the services of accounting firms in Malaysia, because such firms are very familiar with legal and standard accounting practices and can easily manage the payroll of large-scale business.

 

Even though payroll accounting seems easy to many people, it is actually a complicated and complex procedure that must be performed according to a certain set of rules and regulations.

 

Factors like overtime, employee benefits, and taxes have to be considered in payroll accounting. When you hire an accounting firm in Malaysia to manage your payroll, its first task would be to collect accurate and comprehensive data about the employees and the duration for which they have worked for the company. Moreover, it is important to make it clear whether the employees are paid on an hourly or monthly basis.

 

If the employees have a fixed monthly salary, they will begin at a base rate every month. At the end of the month, the accounting firm will adjust the monthly salary according to overtime, bonuses, or any possible pay deductions due to leave or any other reason. Generally, managing salaried employees is much easier than managing hourly employees.

payroll

For the hourly employees, the organizations must have a suitable system in place that would track and keep a record of the total number of hours an employee is working. Hence, it is highly recommended that large organizations hire an accounting firm in Malaysia for better, reliable, and efficient payroll accounting.

 

Hourly employees usually work for a different number of hours every week. Most companies ask them to record their own working hours. Large organizations now usually adopt electronic systems and independent firms for employee management. Once the records of all the employees are properly compiled and maintained, accurate compensation is calculated.

 

The accounting firms in Malaysia have experienced accountants. Such firms ensure maximum precision and accuracy in the payroll process and improve the overall efficiency of the companies.

Importance of Maintenance

It is important to note that the role of accountants and payroll officers is not only restricted to inserting journal entries and compensating the employees. Proper maintenance and reconciliation of the accounts is another critical role of an accountant. In case of any errors in the record, it is the responsibility of the accounting firm to reevaluate the entire process and find the cause of the error or financial discrepancy.

Reconciliation of the accounts means the accountants have to justify and explain the closing balance in any of the control accounts. Such an explanation is given in the form of bank statements, financial statements, or any other supporting documents for specific entries and overall accounts. In the case of a liability, sufficient documents must be presented as well.
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It shows that payroll accounting is essential to maintain thorough records and to avoid any financial crisis that occurs if the records are not properly maintained. Accounting firms in Malaysia can enhance the overall performance of large organizations by taking over the huge responsibility of payroll accounting.

 

It allows the enterprises to focus on other aspects of the company and stop worrying about maintaining a payroll system all by themselves. Ultimately, the quality of HR services and management is greatly improved.

In a Nutshell

It would not be wrong to state that the bigger a company is, the more complex its payroll process will be. A large-scale organization often finds it challenging to maintain proper records of all of its employees and to compensate them in a timely manner.


Hence, independent accounting firms in Malaysia offer payroll accounting and HR management services that allow companies to enjoy efficient payroll management and minimize financial discrepancies.


For more information, feel free to get in touch with us.