#Asia As digital economy grows, Malaysia is looking to tax online businesses

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The plan will also apply to professionals using online platforms to secure clients, such as Uber or Grab drivers

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The Malaysian government through the Ministry of Finance stated that it is looking to tax online businesses starting from next year, as reported by Bernama.

According to Treasury Secretary-General Tan Sri Dr Mohd Serigar Abdullah, the MOF had requested the Inland Revenue Board (IRB) to conduct a thorough evaluation of the matter.

“We need to tax these people who are also earning an income which is taxable. Otherwise, it will be revenue lost for the government with more and more businesses going into the sharing and digital economies,” he said.

Apart from companies, the plan will also include professionals who are using online platforms to help secure clients/customers, such as drivers using Uber or Grab app.

Abdullah encouraged those who “undertake online businesses” to register with Companies Commission of Malaysia (SSM), to enable the government to track their income.

He also stated that according to a study conducted the Land Public Transport Commission (SPAD), Uber or Grab drivers can earn up to RM7,000 (US$1,700), beyond taxable income of RM3,000 (US$744) to RM4,000 (US$993) per month.

Also Read: Malaysian startup StoreHub raises US$850K to enable retail management via iPad

The move by Malaysian government is not unprecedented as government from other Southeast Asian countries (such as Indonesia) has been dabbling in plans to tax local or international tech companies.

Companies such as Google, Twitter and Facebook are encouraged to set up a permanent venture in the country, as opposed to simply set up a representative office.

Meanwhile in Thailand, Uber has called on authorities to legalise its service in the country for the sake of their customers.

“We want to be regulated by the Thai government as we intend to continue operating in Thailand,” said Chan Park, General Manager for Southeast Asia of Uber, as quoted by Bangkok Post.

He also stated that the company received positive progress after the first stage of negotiations with local authorities.

Image Credit: Jadon Barnes on Unsplash

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