Gaurav Bhasin shares his thoughts, Deputy PM to present a proposal to tax Google and Facebook on ads tomorrow.
On the 23 February 2018, the Malaysia Premium Publishers Marketplace (MPPM) took on a partnership with Innity to offer Malaysia its first publisher-led programmatic advertising marketplace platform.
Last week, MARKETING published the thoughts of the industry on this partnership.
Gaurav Bhasin, CEO of Mudah.my also shared his take on this with MARKETING today, “The promise that needs to be delivered to brands is the ability to connect them to consumers in a relevant way during the many micro-moments that make up their day and do it in a brand-safe environment. This requires having ‘scale’ (not aggregated monthly reach but, every minute) and a variety of partners who can contribute diverse first-party data which can help effective targeting of these micro-moments.”
“The initiative by some news publishers in Malaysia to form a consortium to provide advertisers with a data-led, brand-safe environment, in my opinion, is a step in the right direction. Looking at the composition of the consortium, it is likely that a brand safe environment is not going to be an issue. However, tackling the challenges of ‘scale’ and ‘variety’ will be essential hurdles they will need to cross to make this endeavour relevant,” added Gaurav.
Meanwhile, Deputy Prime Minister Ahmad Zahid Hamidi said today that Putrajaya intends to “revisit” the Printing Presses and Publications Act 2012 (PPPA) and will discuss possibilities for self-regulation of the media after Malaysia’s 14th general election. He also added that a proposal to tax Google and Facebook on advertisements will be presented to the Cabinet tomorrow.
The suggested proposal came from Star Media Group group managing director and chief executive officer Datuk Seri Wong Chun Wai, who pointed out that Vietnam imposes a tax on ads posted on Facebook and Google during a lunch dialogue session with editors and publication permit holders.
“Profit margins are slim in the online business, citing the example of how 70% of digital advertising revenue goes to Google and Facebook,” said Datuk Seri Wong Chun Wai.
Professor Harmandar Singh of MARKETING also quipped, “Last September, Lembaga Hasil Dalam Negeri (LHDN) classified Google and Facebook advertising as Royalty and liable to 8% Withholding Tax, but this has yet to be confirmed apparently. LHDN said payments made to Google and Facebook for advertising fall under the scope of ‘royalty’, instead of payment for services. The situation remains grey.”
“A few months ago, Google paid back taxes it owed the Indonesian government since 2015 in full. Indonesia is currently pursuing Facebook and Twitter on tax obligations. I know that Indonesia is the fourth country after Britain, India, and Australia that has managed to get Google to pay tax,” he added.
Finance Minister II Johari Abdul Ghani has stated that the government is conducting a number of studies to come up with a new mechanism to tax advertisements on Google and Facebook.
“These studies are to determine if there is a need to impose the tax. They will determine the use of any possible taxes and their impact,” he said during the closing debate on the Yang di-Pertuan Agong’s speech in Dewan Rakyat on 19 March.