KUALA LUMPUR: Youth and Sports Minister Khairy Jamaluddin does not want the government's contemplation of taxing online businesses to dampen the growth of the digital economy.
Khairy, who is also Umno Youth chief, said such proposals should come with a detailed study and implementation that would not hinder the growth of online businesses, run predominantly by young entrepreneurs.
"I hope we can study this proposal in detail first. It should not burden or hinder the growth of this sector, especially the small and medium businesses, which choose to conduct their business online, mainly to reduce cost," said Khairy.
Khairy today launched the Jom Belajar Koding (Let's Learn Coding) programme under the wing's Young Professionals Bureau (YPB) focused at developing coding and programming skills among rural youth.
This is aimed at both meeting the demand of skilled coders and programmers in the market, while developing online entrepreneurs, all with an eye on the future.
As such, a move to introduce taxes on this fledgling market had Khairy calling for a look at the bigger picture.
Treasury secretary-general Tan Sri Irwan Serigar Abdullah announced on Tuesday a proposal to impose taxes on digital businesses to broaden the government's tax revenue base.
Irwan said the swift growth in numbers and increase in earnings of online businesses have also broadened incomes which are taxable.
"If we tax them too early, if small businesses or startups are taxed immediately, I am worried that it would curtail the growth of online businesses, which are mainly run by young entrepreneurs," said Khairy.
He said a study should also be conducted to identify a revenue threshold to justify the tax imposed on companies.
"If we plan to tax online businesses, there has to be a threshold. This means only companies which achieve revenues above the set threshold can be taxed, while the smaller or startup companies remain exempted.
"If not, it will become an obstacle to the growth and development of the digital economy. So, if we want to proceed with taxing online businesses, this threshold needs to be established first."