Minister of Finance, Lim Guan Eng has announced that foreign-based online services will be subjected to tax starting from early 2020. This was unveiled during the on-going tabling of the national budget for 2019 or officially known as the Belanjawan 2019.
Among the types of online services that are subjected to tax includes software, music, video, and digital advertising. While the minister didn’t mention any specific name during his speech, the accompanying presentation slide during the live telecast by RTM (as shown above) pretty much revealed that popular online services such as Netflix, Spotify, and Steam would likely be affected by the new tax.
For that purpose, the minister also stated that related service providers have to register themselves with the Royal Customs Department. However, Guan Eng didn’t reveal the exact amount of tax that will be imposed on them at the time of his speech.
The announcement today has pretty much turned what we have heard last year into a reality. Specific details regarding the tax on foreign online services are not yet available at the moment though but nevertheless, we reckoned that it is likely to have some noticeable impact on consumers.
Aside from that, digital advertising services notably those run by Google and Facebook will also soon be subject to taxes.
(Image: RTM live feed)