• An important step for Asean
All eyes will be on Singapore and Malaysia by 2020, as neighbouring countries will closely observe the successes and pitfalls of its implementation and will probably introduce a digital tax of its own. If successful, it won’t be long when the digital tax will become a conventional thing in the global digital sector.
Jeremy Chew, iPrice group senior content marketer for product meta-search platform
Because of this uncharted territory, iPrice’s Chew believes that Singapore and Malaysia’s take on digital tax will be a very important step for the ASEAN region on how digital taxation laws will eventually be formed.
“All eyes will be on Singapore and Malaysia by 2020, as neighbouring countries will closely observe the successes and pitfalls of its implementation and will probably introduce a digital tax of its own. If successful, it won’t be long when the digital tax will become a conventional thing in the global digital sector,” said Chew.
During this turbulent time before implementation of digital taxes across the global, tax advisory EY advises digital companies to: “begin viewing their existing digital activity and pipeline projects with a new lens, and to bring tax into the conversation.”
“Digital tax issues may also need to be incorporated into investor communications. Investors need to know about tax issues related to digital activities that may reduce profits if these taxes go into effect.
“They also should be informed about the possibility and potential impact of restructuring parts of a digital strategy or even the need to exit lines of business or markets completely depending on how tax proposals advance.”
Regardless of how the situation sways, Chew believes that it is very unlikely that the Malaysian government will end up side-lining our e-commerce and digital industry due the huge potential and growth is presents to our economy.
“The digital economy presents a great growth opportunity for Malaysia especially when the government is looking to optimise their expenditure to manage its RM1 trillion debt.
“Not to forget that the country’s focus to developing the digital sector was initiated the Dr Mahathir himself during his last outing as a Prime Minister back in 1996 with the Multimedia Super Corridor (MSC) initiative,” he added.