During the tabling of Belanjawan 2019, the digital service tax was announced on last year November. The tax rate is not revealed during that time. Today, the Parliament of Malaysia has accepted the amendment to the tax bill which will allow the government to charge tax to foreign digital companies such as Netflix and Spotify.
These online services will be charged 6% service tax under the Service Tax (Amendment) Bill 2019. This tax will take effect starting from January 1, 2020, onwards. According to the Deputy Finance Minister, Amiruddin Hamzah, the reason to implement this tax is to ensure both local and foreign digital services are equally treated.
In conclusion, introducing this tax you might not know yet how you would be affected. We might not know how Netflix, Spotify or Steam will react for this upcoming tax. At this moment, we have to hope that the digital service providers would not increase the pricing significantly. What do you think about the digital service tax? Do you agree with it? Comment down below your opinion.