Find out about the latest in taxation on why Malaysia needs smart taxation, and the new digital service tax starting on January 1, 2020.

Tax Changes Needed

“Malaysia has been offering tax incentives since the 1950s. The original reason may have been good but conditions have changed. What is the point of offering tax incentives for something that is not relevant anymore but the companies are still taking advantage of that?” ~Professor Jomo Kwame Sundaram

  • Economist and previous council of elders member Jomo opines that smart taxation system required.
  • Government needs to cut business tax exemptions that are unnecessary or no longer relevant.
  • Tax incentives instead to be channeled to companies that enhance Malaysia’s economic capacity, perform R&D, or focus on entrepreneurship.

Digital Service Tax

  • New digital service tax of 6% to be implemented from Jan 1, 2020 increasing cost for Malaysians on overseas digital services.
  • Indirect tax is not new and neighbouring Singapore also expected to implement from Jan 1, 2020.
  • Businesses expected to face transitional challenges complying to, and fulfil requirements.

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How do you view the proposed changes with a smarter taxation system, and the new digital service tax?