Pikom welcomes 6% digital tax announcement

15 Apr 2019 / 18:17 H.

KUALA LUMPUR: Pikom, the National (ICT) Association of Malaysia, is supportive of the government’s stance to impose a 6% digital tax on foreign service providers as of Jan 1, 2020.

The 6% tax will be imposed on imported online services, including software, music, video and digital advertising.

Pikom chairman Ganesh Kumar Bangah said the digital tax creates a level playing field for local players.

“Under the current tax regime, business-to-business sales are already covered, however, foreign business to local consumer sales, in particular for digital goods and services, are not taxed,“ he said in a statement today.

Other countries like Singapore, New Zealand, Australia, Taiwan, Norway, South Africa and Japan already have such taxes or rulings on imported digital related transactions.

New Zealand, Russia and Norway are currently imposing relatively higher taxes – at 15%, 18% and 25% respectively.

“In comparison, Malaysia’s 6% digital tax can be considered low,“ said Ganesh.

Pikom represents the ICT (information and communications technology) industry in Malaysia and its membership comprises over 1,000 companies involved in ICT products and services that command about 80% of the country’s total ICT trade. — Bernama

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