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Year-end roundup 2019: Tax revenue remains a ‘catch-up’ game for boosting govt coffers

Year-end roundup 2019

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To boost the revenue collected from the SST, the government implemented a sugar tax on July 1 this year. The government will also be implementing the service tax on digital services starting Jan 1, 2020 with a six per cent rate.

From the listed services, the government is eyeing to increase tax revenue by RM2.4 billion a year, and the Royal Malaysian Customs Department (RMCD) has opened the registration of foreign service providers starting Oct 1, 2019.

The services that would fall under the basket would be software, applications and video games, music, e-books and films, advertisements and online platforms, search engines and social networks, databases and hosting, Internet-based telecommunication, online training as well as a subscriptions to online newspapers and journals and others.

Executive Director for Indirect Tax Practice at KPMG Tax Services, Ng Sue Lynn said that it is important to note that the six per cent 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 services element is embedded into the price of the goods,” she said.

She also highlighted that the RMCD would face a challenge in identifying foreign service providers, but is positive that it is doable based on the three criteria used.

 

Click here read the full article on Malay Mail.
 

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