With one and a half months left before the new Service Tax on Digital Services kicks in starting 1 January 2020, Malaysians generally are still in the dark about what falls under this tax net. As popular platforms such as Spotify, Netflix and Steam have been named to be among the companies that will be slapped with the tax under the new tax fraction, the question is whether consumers need to bear the tax or it will be absorbed by the providers or passed on to them (consumers).
According to Executive Director for Indirect Tax Practice at KPMG Tax Services Ng Sue Lynn, "It is important to note that the 6.0 per cent service tax is on services and not on goods. Hence, the amount is not as significant as many thought it to be. However, the challenge is when the element of services are embedded into the price of the goods," she said.