According to Section 34 (1) of the CIDB Act 520:
“Every contractor shall declare and submit to the Board, in the manner as may be prescribed by the Authority, any contract which has been awarded to it on any construction work”
The contractor has to upload the Letter of Award for the related project.
If the project is eligible for levy, the Levy Imposition Notification Form (Form CIDB L2) will be generated by the system online and the contractor must settle the levy payment within the specified period of liability.
Failure to declare construction work and fail to pay levy within a period prescribed by the Board is an offense under Act 520.
Duty to Declare and Inform Construction Work
Each contractor must declare and submit to CIDB, in the manner determined by CIDB, any construction work contract that is awarded to him.
The contractor is someone who is executing or completing or undertaking to carrying out or completing any construction work. Any person(s) awarded or have completed any contract for construction work, or undertook the task to execute, manage or complete any construction work, or has executed, managed or completed any construction work is characterized as a contractor unless proven otherwise.
Construction work refers to the construction, extension, installation, repair, maintenance, renewal, transfer, modification, alteration, renovation or demolition of :
Contractors are required to declare and inform CIDB on any construction work within 14 days of being awarded the construction work or before the project is executed or whichever comes first.
Methods to Declare and Inform Construction Works
Contractors are required to fill in the Construction Work Notification Form, which is the CIDB L1/96 Form (Amended 1/ 2003) and attach together supporting documents, which are the:
There are two ways to declare and inform construction work contracts to CIDB, that is via:
Contractor can fill in the CIDB L1/96 (Amended 1/2003) Form in writing and submit with supporting documents to CIDB State/Branch office according to the project’s state location.
2. Online System
Contractor can also declare the construction project using the online system through this link(cims.cidb.gov.my). Upon completing the information, contractor is requested to submit supporting documents with the Letter Accompanying the Supporting Documents within 7 working days through one of the following methods:
*Note: Accompanying Letter for Supporting Documents is displayed on the Project List menu or final page after delivering information on construction works online. The Accompanying Letter for Supporting Documents automatically submits office address, telephone no., fax no. and the email of the CIDB State/Branch responsible.
A levy of 0.125% is applied to total construction work contracts that exceeds five hundred thousand ringgit. The total contract amount includes GST at 6%.
Contractor can review the required amount of payment through the Levy Imposition Notification Form, that is the CIDB L2/96 Form. Contractor can also print the CIDB L2/96 Form, review the levy payment status and list of construction works that was notifed to CIDB online
Levy payment must be settled within 30 days from the date CIDB L2/96 Form is released.
Contractor is required to fill the Levy Payment Form* and pay the levy amount imposed at any CIDB State/Branch finance counter using:
* The Levy Payment Form is enclosed with the CIDB L2/96 form and can be printed online while reviewing the levy status.
** Payment for items (2), (3) and (4) shall be made payable to Construction Industry Development Board or CIDB Malaysia.
Levy exemption is given to housing projects such as below:
*Note: Levy exemptions are subjected to fixed terms and conditions. Please contact the Levy Unit at the relevant CIDB State/Branch office for more information.
Failure to Declare Construction Contracts
Contractors face a fine not exceeding fifty thousand ringgit if they do not declare and submit the construction contracts awarded or do not fully disclose all the facts and liability circumstances to pay the levy to CIDB.
Notice of Demand
Notice of Demand will be issued to contractors who fail to pay the levy within the (30 days) liability period from the date the CIDB L2/96 form is issued. All ongoing registration will be halted upon the release of the Notice of Demand. In addition to the levy payment, the conrtactor is also subjected to legal fees of one hundred and fifty ringgit. Contractor must settle the payment within 21 days from the date the Notice of Demand is issued to avoid disciplinary and legal action.
Contractor is also subjected to their registration receiving disciplinary action if they fail to pay the levy, namely:
Contractor faces legal court action, that is being fine not exceeding fifty thousand ringgit or four times the amount of the levy that requires payment or any penalty that is higher should any of the levy is not paid withn the period set by CIDB.