Rebates to be Deducted Monthly ?

The following article appeared in The Star newspaper on 6 August 2009.

Thursday August 6, 2009
Taxpayers can now have rebates deducted monthly

KUALA LUMPUR: The Schedular Tax Deduction (STD) scheme has been reviewed to enable the deduction of rebates and relief to be done on a monthly basis, Inland Revenue Board chief executive officer Datuk Hasmah Abdullah said.

Previously, she said rebates and relief were only taken into account when taxpayers claimed for it when they filed their income tax returns annually.

“By deducting on a monthly basis, we can have real-time payment of taxes due,” she said, adding that this was in line with the agency’s policy to provide the best service to the public by emphasising on accuracy of information.

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If I refer to the Borang TP1 now, there are already columns to state your rebates for :-

1. Zakat paid (Column D1)
2. Fees/Levy for employment permits paid (Column D2)

The only other rebates not stated is the personal rebates for those taxpayers with Chargeable Income of RM35,000 or less.

However, this rebate would have been taken into account when the employers input the data from Borang TP1 into their payroll system. The payroll system would have incorporated the personal rebates into their calculation to generate a new PCB deduction amount.

This is yet another confusing statement made by the IRB and picked up by the media without any substantial impact on the employees.