THE Ministry of Finance is conducting a detailed study on the proposed taxation on giant technology companies and social media such as Google and Facebook.
Second Finance Minister Datuk Seri Johari Abdul Ghani said the matter was out of necessity, as well as to seek the best taxation mechanism and model.
“It is also aimed at monitoring the comprehensive review of online business taxation being made by the Organisation for Economic Cooperation and Development,” said Johari in his ministry’s wrap up on the royal address.
A suggestion was made that tax should be levied on giant technology and media companies such as Google and Facebook as both are said to control almost 70% of digital advertising expenditure in Malaysia.
The proposal was mooted during a luncheon talk between Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi, media editors and publication permit holders recently.
Meanwhile, Johari dismissed the notion that the people did not feel the country’s economic growth, describing it as inaccurate, as benefits like rising salaries, employment opportunities and overseas spending proved otherwise.
He said based on the Department of Statistics data in 2017, salaries in the services sector increased by 5.4% while that of the manufacturing sector, 8.6%.
“In terms of employment, if the economy does not grow, we will not be able to create more jobs and over the past three years, the Government recorded an increase of 1.1 million jobs,” he said.
He said the people’s spending abroad rose to RM46bil, while retail outlets increased from 66,000 to 73,000 units in 2017.
“We do not deny that some of the people are left behind in the country’s development, but this is the role of the Government in providing specific assistance to people in need,” he said.
On the national debt, Johari said the total amount at the end of December 2017 was RM686.8bil or 50.8%, which was below 55% of gross domestic product. — Bernama