February 26, 2024

We are creating some awesome events for you. Kindly bear with us.

The Budget 2019 expectations on tech for new Malaysia

According to a recent report based on the opinions of the country tax leader of a firm that provides audit and related services, Budget 2019 is expected to be a tough one.

With global economic uncertainties, Budget 2019 needs to be well crafted to meet its objectives of reducing the nation’s debt while ensuring that the country remains resilient and competitive.

With regards to technology, the government may consider a form of digital tax in view of technological developments, where businesses can be carried out virtually anywhere without the need to have a physical presence.

Some countries like South Korea, Japan, New Zealand and Australia have set rules requiring overseas online suppliers to register for value-added tax (VAT) or GST.

In this year’s budget, Singapore introduced an overseas vendor registration system where overseas suppliers and electronic marketplace operators who offer digital services to Singapore consumers will be required to register for GST with the Singapore tax authorities with effect from 1 January 2020.

Meanwhile, India introduced an equalisation levy on online advertising revenue earned in the country by non-resident e-commerce companies.

The European Union is also in the midst of deliberating its digital tax proposals, which may potentially include an interim measure of a tax based on turnover for digital transactions while working towards a long-term objective of a digital taxable presence or permanent establishment framework.

In Budget 2017, efforts were made to capture digital transactions into the tax net by expanding withholding tax on royalties to include payments to non-residents for the use of the software.

However, there were arguments on the differing interpretations of “royalty” taken by foreign jurisdictions resulting in potential double taxation.

The expert argues that perhaps a more effective way would be to introduce a form of digital tax (say, service tax) on overseas suppliers of digital services where such foreign companies are required to register for service tax and charge service tax on such services.

This not only helps in revenue contribution but creates a level playing field between local and foreign companies.

The mechanism in which how new taxes can be implemented with ease and the impact on the growth of the economy should be studied. It is also important that the introduction of any new taxes are as practicable as possible to ensure that businesses have adequate time to prepare and consider the implications.

In view of Malaysia’s fiscal situation, it is clear that private investments will be key in directing growth.

Report by the Malaysian Investment Development Authority (MIDA) indicate that the country is facing stiff competition from other countries where foreign direct investments (FDIs) are concerned. Thus, a lower tax rate would encourage domestic companies to expand their business locally rather than seek alternative locations overseas that will eventually lead to a loss of revenue for Malaysia.

The expert noted that she welcomed International Trade and Industry Minister’s proposal to have a single investment promotional agency to approve investments, perks and benefits for both local and foreign investors.

Currently, there are too many government agencies overseeing tax incentives in specific economic areas. For example, Malaysia Digital Economy Corporation for companies in the information technology/ shared services centre sector and the Halal Development Corporation for halal investments and so on.

She proposed that the management of tax incentives in Malaysia be under the umbrella of MIDA, which will lead and administer the tax incentive framework in Malaysia.

Sub-agencies that specialise in specific sectors can be formed under MIDA and these sub-agencies can form part of the committee evaluating and approving tax incentive applications, giving MIDA a holistic view of Malaysia’s tax incentives regime and will enable it to formulate effective policies for the country as a whole.

From the investors’ perspective, having a one go-to government agency avoids confusion and simplifies compliance process and allow for easier tech collaboration and innovation among other things.

The expert noted that the road to formulating strategies to stimulate economic growth will be tough but she looks forward to 2 November 2018 when the Budget 2019 is announced.

PARTNER

Qlik’s vision is a data-literate world, where everyone can use data and analytics to improve decision-making and solve their most challenging problems. A private company, Qlik offers real-time data integration and analytics solutions, powered by Qlik Cloud, to close the gaps between data, insights and action. By transforming data into Active Intelligence, businesses can drive better decisions, improve revenue and profitability, and optimize customer relationships. Qlik serves more than 38,000 active customers in over 100 countries.

PARTNER

CTC Global Singapore, a premier end-to-end IT solutions provider, is a fully owned subsidiary of ITOCHU Techno-Solutions Corporation (CTC) and ITOCHU Corporation.

Since 1972, CTC has established itself as one of the country’s top IT solutions providers. With 50 years of experience, headed by an experienced management team and staffed by over 200 qualified IT professionals, we support organizations with integrated IT solutions expertise in Autonomous IT, Cyber Security, Digital Transformation, Enterprise Cloud Infrastructure, Workplace Modernization and Professional Services.

Well-known for our strengths in system integration and consultation, CTC Global proves to be the preferred IT outsourcing destination for organizations all over Singapore today.

PARTNER

Planview has one mission: to build the future of connected work. Our solutions enable organizations to connect the business from ideas to impact, empowering companies to accelerate the achievement of what matters most. Planview’s full spectrum of Portfolio Management and Work Management solutions creates an organizational focus on the strategic outcomes that matter and empowers teams to deliver their best work, no matter how they work. The comprehensive Planview platform and enterprise success model enables customers to deliver innovative, competitive products, services, and customer experiences. Headquartered in Austin, Texas, with locations around the world, Planview has more than 1,300 employees supporting 4,500 customers and 2.6 million users worldwide. For more information, visit www.planview.com.

SUPPORTING ORGANISATION

SIRIM is a premier industrial research and technology organisation in Malaysia, wholly-owned by the Minister​ of Finance Incorporated. With over forty years of experience and expertise, SIRIM is mandated as the machinery for research and technology development, and the national champion of quality. SIRIM has always played a major role in the development of the country’s private sector. By tapping into our expertise and knowledge base, we focus on developing new technologies and improvements in the manufacturing, technology and services sectors. We nurture Small Medium Enterprises (SME) growth with solutions for technology penetration and upgrading, making it an ideal technology partner for SMEs.

PARTNER

HashiCorp provides infrastructure automation software for multi-cloud environments, enabling enterprises to unlock a common cloud operating model to provision, secure, connect, and run any application on any infrastructure. HashiCorp tools allow organizations to deliver applications faster by helping enterprises transition from manual processes and ITIL practices to self-service automation and DevOps practices. 

PARTNER

IBM is a leading global hybrid cloud and AI, and business services provider. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. Nearly 3,000 government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM’s hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM’s breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and business services deliver open and flexible options to our clients. All of this is backed by IBM’s legendary commitment to trust, transparency, responsibility, inclusivity and service.

Send this to a friend