Webology, Volume 18, Special Issue on Management and Social Media January, 2021 25 http://www.webology.org Monthly Tax Deduction as Final Tax: The Case of Malaysian Employees Idawati Ibrahim Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia, Malaysia. Zainol Bidin Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia, Malaysia. Natrah Saad Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia, Malaysia. Muzainah Mansor Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia, Malaysia. Received October 08, 2020; Accepted November 17, 2020 ISSN: 1735-188X DOI: 10.14704/WEB/V18SI03/WEB18018 Abstract Malaysia introduced Monthly Tax Deduction (MTD) as final tax system so that salaried earner can be excluded from reporting their employment income. However, the system is on voluntary basis and the take-up rate is low. So, this study was undertaken to examine the issues faced by employees on the implementation of MTD as final tax system in Malaysia. This study comprises a case study on MTD implementation at two institutions which remain anonymous due to confidentiality. Data was collected from 64 responses from open ended questionnaires to employees at both institutions. The data was analysed using thematic analysis. Findings from the analysis revealed that employees‘ hesitat ion to such a system is more apparent. There are three main issues discovered from this study which are: lack of knowledge on MTD as final tax among employees; burden on claiming tax reliefs and the accuracy of MTD calculation; and employer‘s readiness. The findings provide evidence to the IRBM and it will provide good foundation for the IRBM to strategize on mechanisms to enhance the implementation of the scheme. For instance, the information on low readiness among employers may call for roundtable discussion between the tax authority and employers. This would help both parties to discuss possible ways to resolve the issue. Other implications and recommendations for policy makers were also discussed in this paper. Keywords Monthly Tax Deduction, Final Tax, Withholding Tax, Employment Tax, Malaysia.