Employers Receive Tax Exemption if They Help Employees Settle PTPTN Loan
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Employers who will help their employees to settle their National Higher Education Fund Corporations (PTPTN) loans will be receiving a tax exemption from 1st January 2019 and onwards.
However the employers cannot impose any bond or condition on their employees, said PTPTN chairman Wan Saiful Wan Jan, adding that details are yet to be finalised.
“Employers are eligible for tax relief on any repayment amount made, whether it is monthly instalments or a lump sum,” he said while revealing PTPTN’s new policy mechanisms.
Wan Saiful also announced another repayment method which will start from 1st January 2019. This method will deduct borrower’s monthly loan instalments from their salaries through an Income-Contingent Loan Repayment.
He added that the system was already in place in countries such as Australia and New Zealand.
This method would only apply to those who are earning more than RM2,000 and would deduct between 2% and 15% depending on the salary bracket.
“PTPTN will work together with all the relevant agencies to obtain the income data and borrowers’ employers’ details in order to bring this method to reality,” he said.
The relevant agencies are the Inland Revenue Board, Employees Provident Fund and the Companies Commision of Malaysia.
“Based on the information, PTPTN will issue instructions for the salary deductions based on percentage system to employers.
“It will then be employers’ responsibility to deduct their employees’ salaries for the PTPTN loan repayment,” he said.
The PTPTN chairman said that the system ensured that those who could not afford to pay the current monthly instalments would not be burdened and that the rich would not be able to take advantage of the system.
For those without fixed incomes, self-employed borrowers and those earning below RM2,000 a month were required to fill in their income details on PTPTN’s online portal in order to repay their loans based on the same percentage system, he added.
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