by AZREEN HANI/ pic by HUSSEIN SHAHARUDDIN
COMPANIES’ responses to help pay their employees’ study loan and in return enjoy tax relief from the government have been very disappointing, said the National Higher Education Fund Corp (PTPTN).
Since the programme was gazetted by the government in the middle of this year, only six companies have volunteered to help pay the employees’ education loans to PTPTN.
Under the scheme, private companies will enjoy tax relief ringgit-to-ringgit when they spend to pay their staff’s PTPTN loan. But the responses have been poor and the programme will end by Dec 31 this year.
Chairman Wan Saiful Wan Jan (picture) said presently PTPTN has only collected RM90,000 worth of repayment under this scheme, a slow showing largely due to the tepid publicity.
“I think the reason why the take-up rate is very slow at the moment is that we have not been publicising it. It was introduced and announced in the budget speech last year, but it was only gazetted in middle of this year and we only began to promote it about two months ago.
“I am not surprised with the low take-up, but I’m hoping that as we approach year-end, more companies will take up the offer,” Wan Saiful told The Malaysian Reserve in an interview recently.
He said besides the financial benefits to companies, the scheme allows the employers to incentivise their staff and create a goodwill ecosystem within a company.
“For example, if an employer helps pay back the employee’s PTPTN loan amount of RM50,000, the employer is entitled to the same amount for tax relief. The tax relief is given based on the payment that has been made and there is no limit. This will benefit both sides,” he said, adding that the programme offers a win-win situation for both parties.
“The government through PTPTN help generate the best human capital for the job market, and now employers or companies can help their employees to pay back (the loans), perhaps as part of their corporate social responsibility. It’s a very straightforward process,” he added.
The tax relief is among the incentives announced in Budget 2019.
All registered businesses, including sole propriety entities that operate businesses and pay taxes under the Income Tax Act 1967, are eligible to participate in the scheme.
The repayments are for full-time staff and companies are disallowed to collect the amount from their employers.
Malaysian Employers Federation ED Datuk Shamsuddin Bardan said the lukewarm responses to the scheme could be due to the limited financial capacity of these companies.
“We do realise that there is an incentive by PTPTN, but if the financial capacity is limited, there is not much that we can do,” he said when contacted.
“The scheme also adds to a firm’s administrative burden. What I would suggest is for all monthly remittances, be it a tax or PTPTN repayment, be consolidated together with the Inland Revenue Board, so that the fund (PTPTN) could take their share from there,” he added.
Wan Saiful hopes the government would extend the tax relief programme in Budget 2020.
“We have requested to the Ministry of Finance (MoF) for the scheme to continue and I’m hoping it will be included as one of the incentives in Budget 2020. The fact that the MoF has given the support for this year is a positive sign,” he said.
According to the chairman, the fund has also written to respective heads of government-linked firms and major companies to inform them about the programme.
Meanwhile, on collection for this year, Wan Saiful said it is optimistic that it will meet its RM2 billion target.
“Our target, bearing in mind with the current economic situation faced by the country, we set at RM2 billion. But we hope we can surpass that amount because our financial need is higher,” he said, adding that the current collection hovers around RM1.5 billion.