(TAX UPDATE) 2025 Malaysia Word of The Year : Tax (税)

01(TAX UPDATE) 2025 Malaysia Word of The Year : Tax (税)

Introduction

In 2025, one Chinese character won Malaysia’s word of the year (马来西亚年度汉字) … “税” (tax).

Not because it is trendy.
Because it hurts.

For SME owners, tax today is no longer something you settle once a year with your accountant.

It now shows up :

• When you price your services
• When you pay suppliers
• When you declare dividends
• And worst of all — when your refund never comes

Yes, late tax refund has quietly become part of the SME tax story.

You overpaid.
You filed correctly.

You followed the process.

And then? Cash struck.

Meanwhile, penalties for late payment?
Automatic. Fast. No mercy.

That imbalance is what many SMEs are feeling today.

02What Is Really Changing (And Why SMEs Feel Exhausted)

Dividends are no longer “safe money”.
Once you cross RM100,000, personal tax applies.
Small rate. Big signal.

SST is expanding quietly.
Services you never worried about are now taxable.
Some thresholds are as low as RM500,000.
Many only realise after LHDN realises first.

Stamp duty and RPGT have moved into self-assessment.
Sounds efficient.
Feels dangerous.

One wrong classification is no longer an adjustment.
It becomes under-declaration.

With penalties.

Capital gains once assumed “capital” are now taxable if income in nature.
Especially for restructuring and exits.

e-Invoice?
This is where many SMEs are breaking.

Messy data becomes digital evidence.
Audits start from system reports, not suspicion.

Transfer pricing audits are tightening.
Even SME groups are no longer invisible.

Global Minimum Tax arrives in 2025.
You may not pay it
but the data burden may still land on your table.

And through all this?

Refunds are slow.
But payments must be fast.

03The Real SME Frustration

It is not paying tax.

It is :

• Paying early
• Paying correctly
• Paying penalties

And waiting endlessly for refunds

04KTP’s Honest View

This is not a temporary phase but a new tax environment:

• Self-assessment everywhere
• Digital enforcement
• Wider tax base
• Less tolerance for “I didn’t know”

Tax is no longer an annual topic.
It is a daily operational risk whether you like it or not.

If this resonates, you are not alone.
And if it scares you a little good.
That is exactly the point.

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• Wisma KTP, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
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KTP (Audit, Tax, Advisory)

An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

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