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Consider tax rebates for SMEs including property management companies

PETALING JAYA (March 26): The government should consider giving tax waivers or rebates especially on Sales and Services Tax (SST) and corporate tax for small and medium sized businesses or SMEs as they will be among the hardest hit by the Movement Control Order (MCO) which is now extended a further two weeks to April 14, 2020 to stem the spread of the COVID-19 outbreak in Malaysia.

The suggestion came from Malaysian Institute of Property & Facility Managers (MIPFM) president Adzman Shah Mohd Ariffin who said many property management service providers in the country could be considered SME set-ups. 

“The tax rebates can make a lot of difference to the industry to help lessen the burden. A drop of 1% to 2% can go a long way,” Adzman told EdgeProp.my.

“Moreover, owners of strata properties will be in financial difficulty and may not be able to pay maintenance charges and sinking fund contributions for the next few months.

“This will affect the cashflow of joint management bodies and management corporations, especially when it comes to payments to their service providers and for utilities,” said Adzman.

Meanwhile, operational expenses of strata properties could be higher during the MCO due to additional disinfecting measures that have to be taken by cleaning service providers.

“Such expenses will need to be paid in order to avoid disruption of services. Security guards are also needed now to carry out temperature checks on residents and visitors to their respective buildings which will further add on to the cost,” noted Adzman.

For some malls, rentals have been reduced for a specific period, especially by REITs but in the next few months, retail tenants will continue to suffer and may not be able to keep up rental payments. Hence, revenue and occupancy rate of malls will fall in tandem with business closures and rental rebates, he said.

Any assistance provided by the government therefore will be helpful. 

“Most property management businesses are in the SME category and are operating at competitive fees with slim margins, and some are already facing delayed payments from clients,” explained Adzman.

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