Online Shopping Sites to Be Taxed Soon

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Customs Department expects to collect a few billion ringgit in taxes from digital service providers, on top of the RM42 billion it is currently collecting from GST.

Foreign digital service providers will soon be taxed for their services in Malaysia as authorities look to amend several tax laws.

Customs Department director-general Datuk T Subromaniam said the department hopes to present the amendments to the GST Act to Parliament during the next sitting in October.

“Today a lot of these service providers sell goods to Malaysians, but they do not pay the GST because they are not based here.

“It is unfair to companies who are based here as they have to follow the tax regime, therefore we are looking at levelling the playing field,” Subromaniam said.

Examples of foreign service providers to be taxed are likely to be those who sell software and online shopping sites like Lazada and alibaba.com.

He said the department expects to collect a few billion ringgit in taxes once the changes to the law is made.

Subramaniam said the government will consult all stakeholders before making the changes.

As for this year’s GST, he said the department was on track to collect RM42 billlion but may just exceed that amount.

“GST is becoming increasingly important to the country’s economy.

“Collection has shown improvement parallel with the country’s GDP (gross domestic product) growth,” Subramaniam said.

He added that since its implementation in April 2015, 453,000 businesses had registered to pay GST, compared with only 60,000 businesses with Sales and Services Tax.