KUALA LUMPUR: The government is looking to tax online businesses next year, including ride-hailing service providers such as Uber and Grab, said Treasury secretary-general Tan Sri Irwan Serigar Abdullah.
He said the Finance Ministry had requested the Inland Revenue Board to conduct a thorough evaluation of the matter.
The IRB was conducting a study on how technology had changed the way businesses were conducted as many had opted to use virtual business, he added.
“The incomes derived are taxable in nature, otherwise this will result in a loss of revenue to the government,” said Irwan after speaking at the Financial Reform of Economic Development (FRED) in Asia: Public Sector Forum in 2016, here, yesterday.
The government wanted online businesses to register with the Companies Commission of Malaysia so that earnings and revenue could be tracked, said Irwan.
Citing an example, he said the income for a part-time Uber or Grab driver could average RM7,000 a month.
Under the income tax structure, corporates are imposed a 24 per cent rate while the rates for individuals can go up to 25 per cent.
On government debt, which stood at 54.5 per cent of the gross domestic product (GDP) and slightly below its 55 per cent ceiling, Irwan said it would likely be lowered by two to three per cent.
He said the reduction was due to the government loan division, which was now operating on its own.
“We are trying to save where possible in government expenditure, as then there would be less borrowings, meaning less debt.”
The government has targeted to reduce the level to less than 50 per cent.
Trimming the operating expenditure is one area and towards this end, the Treasury has sent a circular to agencies to reduce wastage and lift the savings level.
Irwan said the move had been successful and ministries were tightening the belt.
Earlier, he said the government remained committed to fiscal consolidation initiatives to strengthen its financial position towards a balanced budget in 2020.
It continues to ensure annual operating surplus and the debt level at below 55 per cent of GDP.
The two-day FRED conference was a joint initiative by the Confederation of Asian and Pacific Accountants and the World Bank group.