SHAH ALAM: Digital streaming services like Netflix and iflix are expected to be taxed under proposed amendments to the Goods and Services Tax (GST) Act, said Customs director-general T Subromaniam.
“Yes, yes, definitely,” he replied when asked on whether such services will be taxed under the new amendments.
Speaking at a press conference today, Subromaniam said the proposed amendments have already been submitted to the finance ministry.
“We hope to have these amendments tabled in the upcoming 2018 Budget,” he said, adding that engagement with the industry is currently ongoing.
Subromaniam was asked to comment on the latest concerning proposed amendments to the Act.
The Star had previously reported that the department intended to amend the Act to enable the government to collect taxes from foreign companies operating in Malaysia under the digital economy.
Subromaniam had said that the amendments will allow the government to tap a segment that is worth “billions of ringgit”.
“We are amending a few of the tax laws, especially with regard to GST, to collect taxes from foreign companies that offer digital services in Malaysia,” he had told reporters after the GST Conference 2017 here.
On another matter, Subromaniam said the department will be introducing GST ambassadors to help companies make the right declarations.
Subromaniam said the Customs officers will be placed at various associations and chambers of commerce from Oct 15.
“If they have trouble coming to our office, we will go to them. Our officers will be stationed at the chambers of commerce and associations to help them in GST matters.
“The companies should utilise this opportunity. They can call their members to gather at the premises and ask us to send our officers. We will go and help them. This will increase GST compliance,” he said.
The programme will be carried out in the Klang Valley initially before being expanded nationwide in stages
Subromaniam said as of May or June, the department had issued more than 60,000 notices to businesses on poorly-submitted declarations. They were “told nicely” to make corrections and redeclarations.
“But as of yesterday, less than 10,000 have done so.
“Before we carry out more aggressive measures from January next year, we want to give them this opportunity by appointing these GST ambassadors.
“Hopefully, the GST collection can increase by an additional RM1 billion through this exercise for the remaining three months of this year.
“This programme will run until Dec 31.
“We will see the effectiveness of this programme before deciding whether to continue with it,” he said.
Subromaniam said the problem stemmed from businesses submitting incorrect filings, without having finalised their accounts and simply declaring whatever amounts they wanted.
Subromaniam said the department did not want to resort to “enforced compliance” as it was costly for businesses, giving them a second chance.
“But as a last resort, we will take action against those who are stubborn,” he said, adding the action included going to court and the businesses paying penalties.
Subromaniam defended the need for the GST taxation system.
Going back to the old sales and services tax (SST) will mean a huge loss in revenue, as everything will be digital and they will not be able to tax it, he added.
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