The Muamalat Newsletter Vol. 1 2024

FEM eNewsletter | June 2024 37 authorities, thus avoiding ambiguities and ensuring uniform application. It also involves identifying the key components and enablers of the digital economy, such as e-commerce, digital services, and digital platforms. Additionally, developing reliable methods for gathering statistics on the digital economy is crucial, as accurate data collection underpins informed decision- making and effective tax administration. Establishing effective strategies for imposing taxes on digital economy transactions, including setting appropriate tax rates and ensuring compliance, is another vital aspect of this proposal. Another significant issue is the creation of robust criteria for selecting audit cases within the digital economy sector. Enhanced criteria will improve the efficiency and effectiveness of tax audits, ensuring better compliance and reducing evasion in this rapidly evolving marketplace. Furthermore, there is a need to review current tax incentives for the digital economy to achieve a balance between encouraging innovation and securing tax revenue. This balance is crucial for fostering digital growth while maintaining a fair and sustainable tax system. A thorough evaluation will help identify whether existing incentives are adequate or if new measures are needed to support digital enterprises without compromising fiscal stability. Addressing these issues comprehensively will provide valuable insights and practical solutions for enhancing Malaysia’s tax system in the era of the digital economy. References Athanasaki, V. (2020) Contemporary aspects of the taxation of digital economy: A unified approach for a fairer allocation of taxing rights and the Global Anti-Base Erosion Proposal (“GloBE”)”. European Law Observatory on New Technologies, September Evans, C., Taghizadeh-Hesary, F., Hendriyetty, N. & Kim, C.J. (2022) New Frontiers for Tax in the Digital Age. In (Eds), Hendriyet- ty, N., Evans, C., Kim, C.J. & Taghizadeh-Hesary, F. Taxation in The Digital Economy, New Models in Asia And The Pacific. Routledge, New York. Granger, J., DeClercq, B. & Lymer, A. (2022) Tapping Taxes: Digital Disruption and Revenue Administration Responses, In (Eds), Hendriyetty, N., Evans, C., Kim, C.J. & Taghizadeh-Hesary, F. Taxation in The Digital Economy, New Models in Asia and The Pacific. Routledge, New York. IDEAS (2022) Malaysia should strengthen digital trade ecosystem, emphasising digital economy tax, cross-border data flows, data protection, and cybersecurity Kurihara, K. (2021) Taxation on the Digital Economy, Issues on Implementation and Enforcement. Public Policy Review, 17(1), 1-24 Lucas-Mas, C.O. & Junquera-Varela, R.F. (2021) Tax Theory Applied to the Digital Economy: A Proposal for a Digital Data Tax and a Global Internet Tax Agency. World Bank Group, Washington, DC. MIDA (2022) Malaysia All Geared Up to Become a Hub for Digital Investments Mullins, P. (2022) Taxing Developing Asia’s Digital Economy, Asian Development Bank MyDigital (2022) Malaysia Digital Economy Blueprint. Economic Planning Unit, Prime Minister’s Department Said, F., Shamsunar, I. & Mohamad, J. (2022) Strengthening the Digital Trade Ecosystem: The Next Frontier for Malaysia. IDEAS Policy Brief No. 36 Santos, C.D. & Lumba, A.J. (2020) How Do We Capture the Digital Economy in Statistics? Asian Development Blog Sheng, M.C.L. (2022) Digital Companies: Tax Threats & Opportunities. Feature, MICPA (November- December) Shi (2022) Comprehensive Evaluation Method of Digital Economy Development Level Based on Complex Network Model, Computational Intelligence and Neuroscience The Edge (2024) MDEC to introduce new tax incentive for Malaysia Digital status companies World Bank Malaysia (2018) Malaysia’s Digital Economy: A New Driver of Development