All online businesses must register and pay tax

CY Ming

Modified 5 Jun 2017, 4:43 am

I refer to the report “Online traders under e-commerce must register with CCM” (Bernama, May 28).

Companies Commission of Malaysia (CCM) chief executive officer Zahrah Abd Wahab Fenner announced that all online traders who carry out businesses via marketplace or e-commerce companies must register with the commission within the next six months.

She said the move was aimed at protecting consumers from being cheated and to give confidence to buyers, and that action will be taken on traders who do not register. If convicted, they may face a two-year jail term or fined RM50,000, or both.

In January last year, Domestic Trade, Cooperatives and Consumerism Ministry secretary-general Datuk Seri Alias Ahmad stated that about 30,000 online businesses were registered with CCM from 2012.

He disclosed that actions were taken against 478 online business owners in 2015 under the Business Registration Act 1956 (Amendment 2001) for failing to register their companies.

There was no mention of whether these businesses include those operating outside the country. If the ministry has no control over them, acting against local operators would allow foreigners to take a bigger chunk of online sales in Malaysia.

Already, giant online travel agencies (OTAs) have taken the lion’s share from local travel and tour operators. These OTAs are not subject to local laws and taxes, unlike brick-and-mortar travel and tour companies that are licensed by the Tourism and Culture Ministry.

Licensed operators must comply with many acts passed by Parliament, such as the Tourism Industry Act 1992 and Tourism Vehicles Licensing Act 1999.

If CCM alone cannot rein in unregistered online businesses, it should work with the Malaysian Communications and Multimedia Commission. Both commissions could issue a joint statement spelling out clearly the government’s position regarding online activity and business.

It is easy to issue warnings or go after local budding entrepreneurs exploring the potential of online businesses. The priority should be protecting local businesses and the ringgit.

Malaysians welcome foreign investments and competition, but the playing field must be level. Government agencies should not place local businesses at a disadvantage.

After all, the primary role of CCM is to ensure that all businesses conducted within the country are locally registered, bar none.