Malaysia looks into taxing digital companies

The Malaysia government is examining the possibility of imposing a tax on digital business platforms, according to The Star.

At the moment, internet and digital businesses do not pay taxes because there is no specified tax structure for them.

Malaysia’s Second Finance Minister Datuk Johari Abdul Ghani said recently at the National Tax Conference 2016 (NTC 2016) - that there is no intention to disrupt small online businesses, as it will be difficult for them to grow. Johari said a team has been formed by the government to study the development of taxing on the digital economy.

However, he explained that the study will be more on the online companies and platforms that generate billions of ringgit in revenue at the expense of other tax-paying firms that operate without a digital platform.

He added that the impose of the digital tax is not meant to discourage these digital companies, but more of the government trying to create a level playing field for businesses operating in the country and provide employment for the people.

Meanwhile, CEO Tan Sri Mohd Shukor Mahfar of Malaysian tax authority, the Inland Revenue Board (IRB) was quoted saying that there is also monitoring of the development of the digital economy. However this would require appropriate infrastucture in terms of tech and organisational capability.