Pe­mu­dah pitches im­por­tance of pay­roll sys­tems to busi­nesses

The Sun (Malaysia) - - SUNBIZ - BY WAN ILAIKA MOHD ZAKARIA

What ad­vice can you of­fer to bud­ding en­trepreneurs/ youths who want to start their ca­reer/own busi­ness? Be­lieve in your­self, al­ways keep a strict watch on your dreams, never let any­one tell you oth­er­wise. Do your home­work and, if you at first fail, stand back up again and re­mem­ber, so many oth­ers failed be­fore succeeding.

How do you main­tain PE­TAL­ING JAYA: More than 40% of lo­cal com­pa­nies still do not have pay­roll sys­tems to man­age their em­ploy­ees’ pay­ment and tax fil­ings, ac­cord­ing to Pe­mu­dah (Spe­cial Task Force to Fa­cil­i­tate Busi­ness) mem­ber Datuk Chua Tia Guan.

A pay­roll sys­tem is a soft­ware which or­gan­ises all the tasks of em­ployee pay­ment and tax fil­ings, in­clud­ing cal­cu­lat­ing wages, with­hold­ing taxes and de­duc­tions, print­ing and de­liv­er­ing cheques and pay­ing em­ploy­ment taxes to the government.

Speak­ing to re­porters af­ter de­liv­er­ing his open­ing re­marks at the “Open Day on the Im­por­tance of Pay­roll Sys­tems” last Fri­day, My late grand­fa­ther, the founder of KTC, Datuk Lau Yeong Ching, once told me: “In all mat­ters, deal with them rea­son­ably, ra­tio­nally and fairly”. I have car­ried this motto with me as a busi­ness col­league and as a per­son.

Most-ad­mired busi­ness leader? Why? I don’t have any par­tic­u­lar one, I learn from all of them and I take the good and put it into prac­tice and I avoid the mis­takes that they have made.

How do you stay abreast of is­sues af­fect­ing your Chua said cur­rently less than 50% of small and medium en­ter­prises (SMEs) are us­ing pay­roll soft­ware, not­ing such com­pa­nies rep­re­sent 97% of busi­ness es­tab­lish­ment in the coun­try.

“They al­ways think that the (pay­roll) soft­ware is ex­pen­sive. Ba­si­cally, it will only cost within the range of RM1,000 to RM3,000. With that one-off in­vest­ment, they can ac­tu­ally re­duce their mis­takes and time of do­ing the prepa­ra­tion for the (tax) re­turns,” he said.

Ac­cord­ing to Pe­mu­dah’s records, Chua said, SMEs take a long time to pre­pare their tax re­turns and forms for the Em­ploy­ees Prov­i­dent Fund, the So­cial Se­cu­rity Or­gan­i­sa­tion and the Hu­man Re­sources De­vel­op­ment Fund.

“From our study, this is be­cause they are not us­ing the soft­ware sys­tem,” he said, not­ing most of the large com­pa­nies have ap­plied the pay­roll sys­tem.

There­fore, he said, the “open day” aims to cre­ate aware­ness among busi­nesses, es­pe­cially SMEs, on the im­por­tance of pay­roll sys­tems, which will raise tax-pay­ing ef­fi­ciency and lower ad­min­is­tra­tive costs.

How­ever, based on the World Bank Do­ing Busi­ness 2017 re­port an­nounced re­cently, Chua said, Malaysia has made it eas­ier to pay taxes by in­tro­duc­ing an on­line sys­tem for fil­ing and pay­ing the Goods and Ser­vices Tax.

He said now it takes a medium-sized com­pany only nine pay­ments to com­ply with the tax re­quire­ments, from 13 pay­ments in the pre­vi­ous year. not­ing that Malaysia is placed 23rd out of 190 economies in 2017 re­port, com­pared with 22nd out of 189 economies in the pre­vi­ous year.

How­ever, Chua said, there are lot more im­prove­ments need to be done in terms of re­duc­ing the ad­min­is­tra­tive bur­den of pay­ing taxes and con­tri­bu­tions for com­pa­nies in pay­ing taxes and manda­tory con­tri­bu­tions.

He said the task force hopes to in­crease the us­age of pay­roll sys­tems by busi­nesses to 70% within the next two to three years.

Pe­mu­dah was set up seven years ago to ad­dress the need for closer col­lab­o­ra­tion be­tween the pub­lic and pri­vate sec­tors to en­hance pub­lic ser­vice de­liv­ery and im­prove Malaysia’s busi­ness en­vi­ron­ment.

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