The government is considering to introduce a 0.02% service charge for online purchases including for purchases made on e-commerce platforms such as Lazada and Shopee.
According to Deputy Minister of Communications and Multimedia Datuk Zahidi Abidin, the service charge would serve as an alternative revenue source for the government towards developing Malaysia’s communication infrastructure and improving country’s cyber-security.
The 0.02% service charge would be differ from the previous GST and later SST
The charge could be as low as 20 cent for purchases of RM 1,000 and below. He further explained the minimum transaction amount that will be eligible for the online purchase service charge is not yet decided.
Zahidi Abidin said the proposed online service charge would differ from the previous 6% Goods and Services Tax (GST) in 2015 and later replaced by the 6% Sales and Service Tax (SST) in 2018.
The plan is still at the ministry’s planning stage and not yet decided
“The matter is still at the ministry’s planning stage before being officially presented. This approach is one way to find a source of revenue that does not burden the people.”
“At the same time, the service charge will be used to improve communications security in order to avoid scammers and cyber-security breaches,” he said.
Currently, many online purchases are not taxable and causing losses in government revenue
He further added that many online purchases are not taxable – causing losses and leakages in government revenue. He then explained that charging a tax is complicated and needs to be approved by Parliament. Thus, introducing the 0.02% charge is easier.
Currently, Malaysians are required to pay 6% digital tax for foreign online services such as Netflix and other platforms.