Malaysia Parliament passes digital tax bill, enforced Jan 1

The government is planning to impose a digital service tax of six per cent on foreign digital service providers from January 1, 2020, according to Deputy Finance Minister Datuk Amiruddin Hamzah.

He said the rate was deemed the lowest compared to the rate imposed in several other countries.

Russia, for example, has introduced the tax from January 1, 2017, at the rate of 18 per cent, Norway from July 1, 2011, at the rate of 25 per cent, and New Zealand from October 1, 2016, at the rate of 15 per cent, he said.

“They (digital service providers) should have no problem to pay…because it’s only six per cent. If they can comply with Russia, Norway and New Zealand, I don’t see any reason why they should refuse to comply with the rate in Malaysia.”

The deputy minister said this when winding up the debate on the Service Tax (Amendment) Bill 2019 at the Dewan Rakyat here today.

“It’s not fair if only the local digital service providers had to pay the tax. This is not a new tax, it’s just having the scopes extended to providers in other countries,” he said.

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