Digital service providers to start paying GST soon

KUALA LUMPUR: Digital service providers such as Facebook, Youtube and Uber will have to start paying the Goods and Services Tax, said Customs Department director-general Datuk Seri Subramaniam Tholasy.
He said the department hopes to present the amendments to the GST Act to Parliament during the next sitting in October.
"Today a lot of these service providers sell goods to Malaysians, but they do not pay the GST because they are not based here.
"It is unfair to companies who are based here as they have to follow the tax regime, therefore we are looking at levelling the playing field," he told reporters after attending the opening ceremony of the two-day GST conference here today.
Subramaniam said the department expects to collect a few billion ringgit in taxes once the changes to the law is made.
He added that he could not give the exact figure as the department needs to find out the size of the digital economy.
Subramaniam pointed out that many people can buy products from service providers abroad and pay via credit card and these goods have no GST on them.
He said this cross border service is a big issue for many nations in regards to taxation.
Subramaniam said the government will consult all stakeholders before making the changes.
"The problem is not between business to business but business to consumers, who buy directly from abroad," he said.
He said so far more than 453,000 businesses have registered to pay GST and about 100,000 of them are under the mandatory threshold of RM500,000.
He said the reason is that some big companies are unwilling to do business with those who are not registered.
Subramaniam said the department is on target to collect RM42 billlion from GST this year but may just exceed that amount.