Management & Leadership

Tax benefits to help SMEs

Tax benefits to help SMEs

Running any business means you need to find ways to reduce cost and maximise profit at all times. This is made easier if you are running a small business mainly because it is more manageable as compared to a large corporation with a lot of bureaucracy and red-tapes.

Tax benefits that help

In a small business, you will be accorded with some form of tax benefits when you carry out your yearly audit. While many look at tax as a drag, you could actually get this to work to your favour as long as you know where to look and how to manipulate them.

Corporate Tax

Starting 2017, the government has announced a new corporate tax scheme. This was done to help businesses in the SME sector. Previously, you will be charged 19% for income up to the first RM500,000. This has since been reduced to 18%. Besides that, you will be liable for tax of:

  1. 1% for any income increase between 5 and 10%
  2. 2% for increase between 10 and 15%
  3. 3% between 15 and 20%
  4. 4% for 20% and above

Tax incentives

You get to enjoy incentives for certain expenditures that include:

  1. ICT – you get to get relief for purchase of ICT (information communication technology) equipment and software from 2016 onwards. The capital allowance claim is 20% initial allowance and another 20% for annual allowance
  2. Hospitality – there are special tax exemptions for statutory income if you are in the hospitality industry for new hotels in 4 and 5 stars as well for tour operators
  3. Industry 4.0 – special automation equipment allowance are given for companies involved in moving into Industry 4.0
  4. Manpower – You get some form of relief if you hire the disabled (OKU) in your business. this is offered and certified under JKM or Department of Social Welfare. So, take note of any tasks that can be performed by the disabled.
  5. you can enjoy further deductions if you send your employees for training that are not part of the HRDF or Human Resources Development Fund or that are eligible under the SK1M.
  6. Halal products applying for ISO certification
  7. Research and development efforts

These are just among some of the ways that can really help you reduce cost and if you are mindful, you can start planning your expenditure so that you get to enjoy the benefits.