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KUALA LUMPUR: The Goods and Services Tax Act 2014 will be amended to enable the government to collect billions of ringgit in taxes from foreign companies operating in Malaysia under the digital economy, reported Bernama yesterday.
Customs Department director-general, Datuk Seri Subromaniam Tholasy said the proposal for the amendment would be tabled when Parliament reconvenes next month and that the proposal is still being discussed with the Finance Ministry and relevant authorities.
He said the biggest loss in the digital economy occurs during business-to-consumer transactions as foreign businesses receive immediate payment from consumers here and their services are not taxed.
“That is discrimination towards local players who are taxed,” he told a press conference on the sidelines of the GST Conference 2017 here today.
Also present was Treasury secretary general Tan Sri Dr Mohd Irwan Serigar Abdullah.
Subromaniam cited software developers and well-known social media platforms as businesses in Malaysia’s digital economy that currently enjoyed tax-exemptions.
Meanwhile, he said the Customs Department is on track to achieve its tax target of RM42 billion for this year, including contributions from GST. It collected RM41 billion in total taxes in 2016.