AS a direct casual impact of the Covid-19 global pandemic, the use of technology has accelerated at an unprecedented scale and it is even clearer now that technology plays a vital role in our collective future.
Businesses in the private and public sectors are finding creative ways to leverage on technological tools and solutions to change their operating models to drive revenue and generate new business opportunities as the economy recovers.
They are also upgrading their technology to cater for online business transactions, webinars, and user-interface to allow end-to-end seamless connectivity with their customers.
Furthermore, many businesses have changed their operating strategies to be more centralised and to allow more flexibility by having remote working environments.
In line with this new reality we operate in, the Inland Revenue Board (IRB) should consider enhancing its systems and processes to facilitate the tax obligations of employers.
Under the 12th Malaysia Plan, the government promised to reduce bureaucracy and build reliable infrastructure and ecosystem to attract quality foreign investments.From an employer’s perspective, Malaysia’s tax administration process can be improved by considering these areas:
> Personal identification number or PIN for logging into ezHASiL (the IRB’s online platform)
The IRB is encouraging all employers to perform online submission to discharge their tax obligations. To log in to ezHASiL, the employer must apply for a PIN.
However, the log-in requires the company’s director or company’s representative (the designated user’s) identification or passport number and this poses a challenge as in any organisation, there will be changes to the functions of the individual or personnel turnover.
In addition, where the company would like to reset the log-in PIN, the company must be able to provide the IRB with the designated user’s details as part of the verification process.
Given the above restriction, ideally, the PIN should be allocated based on the company’s registration number (which is permanent) instead of requiring the designated user’s identification or passport number.
> Timeline in submitting notification to the IRB
With many companies having an international presence, efficiencies via human resources and payroll operation functions are commonplace, with many such functions operating globally in single locations rather than on a country by country basis.
The ability for such organisations to mobilise its workforce quickly and effectively in adapting to changing business needs is essential.
Hence, it can be a challenge for the employer to meet the 30-day timeline for to notify the IRB of an employee’s departure from Malaysia especially in a situation where the employee has to leave Malaysia prior to the actual date of cessation.
It takes times for the payroll of the employee to be finalised to confirm the actual remuneration of the said employee.
It will be good for the IRB to allow some flexibility on the timeline for an employer to submit the notification when an employee is leaving the country on short notice.
> Online submission
It is appreciated that the IRB has launched numerous applications in its web portal to allow taxpayers, including employers, to perform online submissions to expedite the tax registration and clearance process.
The IRB should continue to provide training/guidance to encourage employers and taxpayers to make good use of the online platform. In addition, a standard procedure across all IRB branches should be adopted, particularly on the submission of tax clearance documents by employers via e-SPC.
There have been instances that even though documents have been submitted by employers online via e-SPC, there have been requests by the IRB to resubmit the same documents or additional documents manually to the IRB for processing of the tax clearance letters.
This is not in alignment with the initiative of online submission via e-SPC.
Where possible, any additional documents required to facilitate the issuance of the tax clearance letters, the documents should continue to be submitted online to the IRB where a clear trail of the submission and any follow up documentation is all maintained in a single location.
> Dedicated application systems for specific requests with real time tracking
The IRB may consider having a dedicated application system to cater for each type of request, such as tax clearance and/or appeal with the assessment unit, tax payment position and/or tax refund with the collections unit.
With this system, the applications can be dealt with more promptly and efficiently by the IRB.Additionally, with a tracking facility in place, employers or requestors can view the submission or application status promptly.This also allows the IRB to monitor its own operational status and deal with backlogs as appropriate.
The above represent some of the processes that employers wish can be in place to improve tax compliance processes.
Hopefully, this coming Budget 2022 will introduce some of these changes alongside the usual goodies for the rakyat.
Long Yen Ping is executive director and Fong Chooi Lian is director of global mobility services, KPMG Malaysia. The views expressed here are the writers’ own.