Malaysia confirms imposition of digital tax on foreign suppliers and raises public outcry

The Malaysian Ministry of Finance (MOF) has announced that it will apply the foreign digital service tax from 1 January 2020. This tax, called the 2019 budget, will also include software, music, video and advertising. digital, as reported by the star.

"For online services imported by users, foreign service providers will have to register with customs, apply and pay taxes on the corresponding services," said the Ministry of Finance, represented by the Minister of Finance , Lim Guan Eng.

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The application of the tax is supposed to seek a level playing field between physical stores and online stores, especially online stores owned by foreign companies.

The 130-minute speech that underscored Malaysia's commitment to supporting a digital-centric and entrepreneurial economy underscored key points, such as the collaborative approach between 4P ( public, private, professional and popular sectors) to manage and direct projects and most government activities. Capital funds will be effectively distributed to businesses at different stages of their financing needs.

Equivalent funds of RM 2 billion were allocated to co-invest with private equity and venture capital funds, as well as RM 50 million to create a co-investment fund (CIF) to invest alongside Private investors via new alternative financing. crowdfunding and peer-to-peer funding platforms.

Even with positive ratings on plans set to allow entrepreneurs to take advantage of the digital economy's policy, the public is still disapproved, particularly those currently in the newly accelerated digital ecosystem.

Kenneth Ho, CEO of BEAM, a Malaysian network platform, shared his thoughts. I see where the government comes from, but personally I do not support the idea of ​​introducing such a tax in such a short time, especially when the local digital industry is still relatively new, "Ho said.

"I think this will create a negative business sentiment for the government and may lead to more businesses running their businesses outside of Malaysia. The last thing we want is to create more reasons for companies to leave the Malaysian soil. We should do everything in our power to empower entrepreneurs and encourage more established entrepreneur initiatives to contribute to the new ecosystem. It does not do that, "said Ho about how it would affect startups in Malaysia.

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The general sentiment registered on social media since Friday has been thwarted by the fact that the digital tax may end up driving prices up to consumers.

As for Jia En Low, founder of Amazing Fables and a founding member of MaGIC, he said that this government initiative was in line with global trends to reduce such tax loopholes on the part of governments.

"Digital taxes are used primarily to ensure that large international digital companies are taxed equitably on revenues from the local economy. However, the crucial point is who will absorb most taxes, whether it's platforms or cost, passed on to consumers, "Low explained. But Low agreed that the impact will not be too big for consumers because they use foreign services as needed.

The announcement would have included logos from foreign companies such as Spotify streaming music, Netflix streaming video and the Steam game distribution platform.

This tax policy, whose theme is "A credible Malaysia, a dynamic economy, a prosperous Rakyat", will constitute the essential test of the government led by the Malaysian Prime Minister Tun Tun Mahathir Mohamad, who inherited a total of 1 065 billion RM government.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "As quoted in The Star, here are the details of the policy Budget 2019:
All imported services, including online services such as software, music, video and digital advertising, will be taxed with a service tax effective January 1, 2020. "data-reactid =" 38 "> As cited in The Star, here are the details of the fiscal policy of the 2019 budget:
All imported services, including online services such as software, music, video and digital advertising, will be taxed with a service tax effective January 1, 2020.

The allocation of RM1bil must implement the National Fiber Optic Connectivity Plan, the mandatory fixed broadband price (MSAP) applied having dropped by at least 25% by the end of the year. # 39; year.

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