Monthly Tax Deduction (MTD or PCB, Potongan Cukai Bulanan) was introduced in January 1995, is a system of tax recovery where employers make deductions from their employees’ remuneration every month in accordance with the PCB deduction schedule. This is mandatory, in that neither the employer nor employee has any choice in the matter.
PCB is Not Final TAX
Intended to reduce the employee’s burden to pay in one lump sum, the PCB deduction is normally not enough to cover the actual tax payable by tax payees. These deductions are intended to reduce the employee’s burden by making monthly tax payment in advance to LHDN. However, tax payees still need to file the returns.