Online services including Steam and Netflix will be subjected to 6% digital service tax

Last November, we reported that the Malaysia government is planning to implement a tax on digital services such as Steam, Netflix and Spotify. Now the digital service tax is approved at a 6% rate and will come into force starting from 1 January 2020 according to Deputy Finance Minister Datuk Amiruddin Hamzah.

The rate is deemed fair and the lowest when compared to the tax rate in other countries. For example, Russia’s 18% tax rate and Norway’s 25%.

“(Digital service providers) should have no problem paying… 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,” he said.

He also stated that local digital service providers are already giving the tax, and they are extending its reach to cover foreign companies too.

“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.

With the implementation of digital service tax, there is a possibility to see a rise in prices on these digital services. However, there is a chance where the providers decide to absorb the tax too. What are your thoughts? Tell us in the comment section below!

Source: New Straights Times

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