COVID-19 & MCO: Tax Management Strategies for SMEs Part I

013 EASY METHODS FOR THE TAXPAYER

We know that a lot has changed in the last month. 

The world has stopped as everyone watched with disbelief the coronavirus pandemic spread its reach across every corner of the globe.

Most of the entrepreneurs are stressed to face the uncertainties. 

How long can their business be sustained? What action shall they take?

02Tax Credit

Now is a recession period for business owners due to the COVID-19 crisis. Experiencing substantial declines in sales or even a complete suspension of operations, they face cash-flow insolvency threats. 

In this critical time, everyone is concerned about their cash flow, so does the Inland Revenue Board (IRB). Instead of asking a tax refund, we shall opt for contra. 

Write to IRB to make use of any tax credit in the account to set off against future tax payable.

03Section 129A of ITA 1967

Here is a unique case, we are seeking tax relief because of poverty. You have to prove you have no money by quoting this section. Mr Savarana suggested we can show how tight our cash flow is and any obligation with supporting documents.

04Financial Assistance by Government

We can take advantage of Prihatin Package introduced by the government..

The Prihatin Package is seen as providing breathing space for small and medium-sized enterprise (SME) and micro-entrepreneurs by helping to alleviate their cash flow burden to overcome the COVID-19 pandemic.

The key to success in a business is the implementation of those strategies early. Hopefully, these strategies will help you better understand how to manage your company tax efficiently.

05What KTP say?

Based on our experiences, is indeed very difficult to seek a tax refund from IRB. Also, this always attracts unwanted attention from IRB. Mr Savarana gives a very brilliant way to set off our tax credit.

In this crisis period, we think there is no harm to try all possible ways to save money. As people say “your job is to apply, and their job is to reject”.  

06Sources: 

Cash-flow insolvency

Covid-19 & MCO: Tax Management Strategies for SMEs

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