Here’s more on the topic of taxation of Uber and Grab drivers. The government is seeking to tax individuals engaged in digital or online businesses, including Uber and Grab drivers, to address its lost opportunity for revenue from a fast-growing segment of the economy, The Star reports.
“The Inland Revenue Board (LHDN) is doing a thorough evaluation and study to go into taxing individuals engaged in digital or online businesses as the income they earn is taxable,” said Treasury secretary-general Tan Sri Mohd Irwan Serigar Abdullah.
“It will be a revenue loss for the government if we did not do anything about it because going forward, more and more businesses will go into sharing of the digital economy,” he told the media at the Public Sector Forum on Financial Reform for Economic Development in Asia yesterday.
Irwan pointed to local Uber drivers as an example, noting a recent survey by the Land Public Transport Commission (SPAD) which indicated that part-time Uber drivers could earn an average of RM7,000 per month.
However, without a framework in place, the government is unable to collect taxes from this group even though they earn enough to pay tax. Irwan said that there’s no specific timeframe to implement the tax framework for online businesses as the matter is still being reviewed. The Treasury sec-gen hopes to get things finalised by next year.
He revealed that LHDN has formed a division to address issues relating to Internet-based businesses, and is now working with the Companies Commission of Malaysia to come up with the right approach.
“Internet businesses are growing fast and they are becoming important to everyone in society. But tax collecting agencies are finding it difficult to collect taxes from these new sources, so we need to devise new ways to address this, otherwise it will be revenue lost for the government,” he reiterated.
Earlier, The Sun reported that the government may look to tax Uber/Grab drivers should the should it fail to impose tax on Uber’s ride revenues. The app-based driver service company employs shrewd tax management strategies that has so far escaped the net cast by tax authorities including those in Australia, Canada, Hungary, the UK and US. Ride fares go straight to Uber BV in Netherlands and not the company’s Malaysian office.
The free daily followed up with Uber Malaysia GM Leon Foong, who said that its drivers are responsible for their own tax affairs. He also said that between 70% to 80% of the fare collected from a passenger is channelled to the driver on a weekly basis.
We see no reason why income from Uber/Grab should be exempted from income tax. Salaried employees have nowhere to run from the taxman, and no group – be it Uber drivers or MLM evangelists – should get a free ride. What say you?
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sohai talking.
Under the current regime, it is all self declaration.
So the question is only whether the income is taxable or not taxable. It has nothing to do with whether you make the money through online or not.
Does it include making money through AP?
Govt money philosophy: Your money is my money, my donation is none of your business.
LHDN only deals with income tax. How about Kastam, who handles GST? Are they not interested in taxing them (and passengers and suppliers) too?
If revenue over rm500k per annum, yes.
Below that, it’s voluntary.
I think Malaysia will never be a border free country… Tax this, tax that, tax everywhere… BM is Great! I will vote for then next election (thumb up)
@sohai point taken, if such a revenue is taxable than please elaborate on the taxable deductions also.
Ultimately, it is counted as the income of the individual drivers, which the drivers should declare as personal income tax when doing their yearly income tax filing. It is up to the individuals themselves to declare their total income of the year if the total amount falls within the taxable category. It goes the same to sellers on eBay, Amazon, Lelong.com.my, Lazada, etc. Individuals underdeclaring tax is just plain tax evasion. On another note, if a full time Uber driver can earn so much income to the point it is taxable, yet Uber rates are cheaper than teksi, I wonder how much those teksi company/drivers really earned per year, especially those drivers who do not use the meters.
RM50 from KLCC to Pavilion abang.
Is not so simple bang.
They don’t have a good framework to determine what’s the “taxable” income portion that’s why they are embarrassing themselves in public.
It is not as straight forward as taking the whole amount collected as taxable income. Do you think that’s fair if that’s the case? Clearly there is “cost” involve for the driver, such as fuel and the car itself. Expenses like road tax, tyres, battery? So the real income portion is alot smaller.
Plus, there are other debatable issues like the ride sharing concept. Is it income to me if I car pool with my colleague to work but he contribute some money for the petrol?
Govt start sucking money again…whr our chinese 2d state minister for sawarak? whr?
Why does it have to be chinese to represent sarawakians? Racist much?
gov know how to tax here and there… but later we see nothing except for price increase.
Uber driver drives to look for small extra income also want to tax…..GST was setup to close that loop hole already…..lagi mau tax.
GST, VAT, etc r never meant to replace income tax. Not in any country around the world, at least.
There’s money in them thar internet-based businesses alright. Tax ’em but be fair and wise so as not to kill the golden goose. Done right it’s good. Mismanaged and miscalculated – it can all go awry pretty quick. Then there is the ever-present issue of prudence, wisdom and sincerity lacking in government management of its tax ringgit as can be seen in the annual accounts report. Complex this is.
So what about taxi drivers? Those gangster in KLCC area always ask for RM50~RM100 to nearby area without using meter. Do they pay income tax from that? hahaha.
As someone commented above, individuals are already taxed from their yearly income. The issue that I can see is many individuals who also doing side income via online business are private sellers and do not have their own company. So in all honesty, even if they declare their yearly income to LHDN, their earnings from these online side income was not included in the EA form. So to the honest individual, he/she would also declare their side income to LHDN so they are taxed properly. That is how the system should have been used.
But if the government want to further add whatever tax they want to impose for the sake of online business, then that is absurd at best!
Before we start bashing people, we must get your knowledge and facts right first time, then we will have strong points to argue.
To break it down, what I believe is correct at present and always should be:
Uber/Grab drivers & online businessmen/women – income tax only, thru declaring to LHDN.
No more taxing. Please.
Part time 7k a month? Show me. I follow you 1 month
Itu duit online maaaaa…..silap2 itu org pun tak tahu duit mana masuk. Mungkin duit derma. Derma no need to pay tax kan?
In the they will get it through GST though, as people will spend the money they earn..the reason these people doing online buss is they are seeking extra money as the current situation they can no longer depends on the monthly salary.