The Government Is Planning To Impose GST On Netflix And iFlix

The digital economy is a source of revenue Malaysia has yet to tap into.

Cover image via TIME Magazine

Brace yourselves, Netflix and iFlix subscribers. Higher subscription prices might be coming, because the government may be imposing the Goods and Services tax (GST) on digital streaming services soon.

Image via Bustle

Customs director-general Datuk Seri Subromaniam Tholasy confirmed in a press conference today, 3 October, that online streaming services will be included in the Customs Department's proposed amendments to the GST Act, which were proposed last month. 

The Customs Department announced last month that they will be proposing several amendments to the GST Act to include foreign companies that are doing business online with Malaysian customers

Customs director-general Datuk Seri Subromaniam Tholasy.

Image via New Straits Times / Mohd Azren Jamaludin

Subromaniam said that the amendments will enable Putrajaya to collect billions in taxes from the digital economy, hence increasing government revenue and boosting the country's economy.

He added that the proposal has been submitted to the Finance Ministry and will be tabled when Parliament reconvenes later this month.

At present, Malaysians do not have to pay GST to the Malaysian government when they purchase products or services from e-commerce sites such as Amazon, Alibaba, or video gaming services such as Steam or the Google Play Store.

Subromaniam also highlighted that the country will be missing out on a "big source of revenue" if the government does not think of ways to tax online companies

A blimp reading "Google must pay tax" is seen floating over the Tel Aviv skyline.

Image via Reuters / Baz Ratner

"In the new age, things have changed. A lot of things are different now. It is a big source of revenue," he was quoted as saying by Malay Mail Online.

"Taxes from the digital economy... we can easily collect a couple of billions of ringgit. It runs into several billions," he said during the GST Conference 2017 on 18 September, as quoted by The Star

The notion of taxing online companies is not a new one. In fact, several countries in the European Union, such as Germany and France, have been pushing towards subjecting such companies to sales or consumption taxes.

Do you think digital streaming services like Netflix and iFlix should be subjected to GST? Let us know your thoughts in the comments section below.

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