digitisation

 
 

G20 agrees to wrap up Big Tech tax rules by 2020

TOKYO: Group of 20 (G20) finance ministers agreed today to compile common rules to close loopholes used by global tech giants such as Facebook to reduce their corporate taxes, a final communique issued by the bloc showed.

Facebook, Google, Amazon and other large technology companies face criticism for reducing their tax bills by booking profits in low-tax countries regardless of the location of the end customer. Such practices are seen by many as unfair.

The new rules would mean higher tax burdens for large multinational companies but would also make it harder for countries such as Ireland to attract foreign direct investment with the promise of ultra-low corporate tax rates.

“At the moment we have two pillars and I feel we need both pillars at the same time for this to work,” Japanese Finance Minister Taro Aso, who chaired the G20 meetings, told reporters.

“The proposals are still a little vague, but they are gradually taking shape.”

Britain and France have been among the most vocal proponents of proposals to make it more difficult to shift profits to low-tax jurisdictions, with a minimum corporate tax also in the mix.

This has put the two countries at loggerheads with the United States, which has expressed concern that US internet companies are being unfairly targeted in a broad push to update the global corporate tax code.

Big internet companies say they follow tax rules, but they pay little tax in Europe, typically by channelling sales via countries such as Ireland and Luxembourg, which have light-touch tax regimes.

“We welcome the recent progress on addressing the tax challenges arising from digitisation and endorse the ambitious programme that consists of a two-pillar approach,” today’s G20 communique said.

“We will redouble our efforts for a consensus-based solution with a final report by 2020.”

The G20’s “two pillars” could deliver a double whammy to some companies.

The first pillar is a plan to divide up the rights to tax a company where its goods or services are sold, even if it does not have a physical presence in that country.

If companies are still able to find a way to book profits in low-tax havens, countries could then apply a global minimum tax rate to be agreed under the second pillar.

“I see a high degree of willingness to work together on this issue that few could have anticipated a year ago,” said Pierre Moscovici, the European Union Commissioner for Economic Affairs.

“We truly believe that the tech giants, which are not only the GAFA, must pay their fair share of tax where they create value and profits.”

GAFA is an acronym commonly used to refer to Google, Amazon, Facebook and Apple when talking about the influence of large technology companies.


Prepaid-postpaid convergence to drive Digi’s FY19 revenue

KUALA LUMPUR: Digi.Com Bhd is banking on prepaid-postpaid convergence and better average revenue per user (arpu) to drive its revenue for the financial year ending Dec 31, 2019 (FY19).

“Currently, postpaid accounts for 25% of our base. We definitely see that growing. Our strategy is to grow our postpaid and also to drive the prepaid to postpaid conversion,” its CFO Inger G. Folkeson told reporters at its AGM today.

She said it will drive arpu for existing customers by providing more value and more uplifting plans to customers, as well as easy entry device bundle plans and the Digi PhoneFreedom 365 plan which will also drive earnings before interest, tax, depreciation and amortisation (ebitda) going forward.

“We are quite confident this will have an impact on our revenue. When it comes to low single-digit ebitda growth, this is also driven by efficiency in our sales and distribution channels, digitalisation and moving more into digital interfaces with our customers for instance MyDigi app as well as kiosks for top-ups and et cetera,” she added.

In terms of operational efficiency to reduce cost, she said it is continuously working on improving its processes and revamping its technology operating model, and its sales and marketing processes.

She said the programme, which is implemented across all its different units and processes, is aimed at freeing up capacity to drive growth.

Earlier this year, the group announced its FY19 guidance of low single-digit growth in ebitda, service revenue to be around 2018 level and capital expenditure (capex) to sales ratio of 11-12%. The capex will be used for network enhancements and digitisation of its network and services.

Last year, the group achieved ebitda of RM2.96 billion and service revenue of RM5.92 billion while capex spent was RM685 million or 11.6% of sales ratio. Its blended arpu currently stands at RM41.

In the first quarter ended March 31, 2019, the group achieved ebitda of RM723 million and service revenue of RM1.44 billion, and invested RM168 million capex for IT and network capacity upgrades, fibre network expansion and network function virtualisation.

On Digi’s home fibre pilot which is ongoing in Malacca and the Klang Valley, Folkeson said it is conducting trials to see the possibility of entering the market and will work on a strategy after an assessment based on the pilots.

Chief technology officer Kesavan Sivabalan said it is looking at various options including leveraging on its own fibre infrastructure and working with several partners. Digi had 8,400km of fibre network as of end-2018.


Lufthansa eyes Thomas Cook’s Condor with buyout offer

FRANKFURT AM MAIN, May 7 — European airline giant Lufthansa said today it had offered to buy carrier Condor from British parent company Thomas Cook, opening a new chapter in its fast-paced growth through buyouts. “We have made a non-binding…


AEON credit net profit increases to RM354.62m in FY19

KUALA LUMPUR, April 25 — AEON Credit Service (M) Bhd’s net profit for the financial year ended Feb 28, 2019 (FY19) increased to RM354.62 million from RM300.06 million recorded in the previous financial year. Revenue rose to RM1.37 billion from…


Shared prosperity is Malaysia's key message at Apec 2020

KUALA LUMPUR, March 20 — After more than two decades, Malaysia will be hosting the Asia Pacific Economic Cooperation (Apec) leaders’ summit in 2020, with the key message of shared prosperity. International Trade and Industry…


MIEA: Extend Home Ownership Campaign perks to secondary market

PETALING JAYA: The Malaysian Institute of Estate Agents (MIEA) has urged the government to extend the incentives offered during the Home Ownership Campaign (HOC) to first-time home buyers looking to buy from the secondary market.

“MIEA is very appreciative of the fact that the Finance Ministry has introduced new programmes to stimulate the primary market by focusing on first-time home buyers, however it is critical that we should not close the door to first-time property buyers by limiting incentives to only properties offered by developers,” it said in a statement today.

MIEA said that the stamp duty exemption on instrument of transfer, which has been extended from Jan 1 to June 30 this year for properties ranging from RM300,001 to RM1 million, be made available for first-time home buyers of secondary properties.

It also urged the government to offer the stamp duty exemption on instrument of transfer for loans up to RM1 million during the same period to this category of buyers.

“There are significantly more varieties of homes at affordable prices for first-time home buyers within the secondary property market. Based on this premise, we should allow for the exemption of stamp duties to cover the purchase of homes within the secondary market by first-time buyers,” it added.

MIEA has suggested that a “Rent & Buy Programme” be set up for this category of buyers, through a special vehicle or banks to help them in two areas namely funds for a down payment and loan eligibility.

“We also request Bank Negara Malaysia to study and implement a fair and equitable loan approval and streamlined process for first time buyers and/or set up a special revolving fund to fund these buyers.

“This will allow for a shift in the dynamics of the property market, not only allowing for the disposal of ‘overhang’ properties but also unsold completed projects that are vacant,” it said.

According to the National Property Information Centre, 80% of all residential property transactions nationwide are from the secondary market while the primary market makes up the remaining 20%.

As such, MIEA said that the secondary market is the “bedrock” of the property sector, which sustains the real estate market and provides the thrust for its sustained growth.

It also urged the government to provide support to the real estate fraternity and real estate firms to modernise through technology and digitisation, and proposed that a tax exemption be given to those who are keen to invest in digitisation.


VDA: German carmakers to invest €60b in electric cars and automation

FRANKFURT, March 2 — Germany’s car industry is to invest nearly €60 billion (RM277 billion) over the next three years on electric cars and automated driving, the head of the VDA car industry association said ahead of the Geneva motor show….


Standard Chartered’s 2018 profits rise despite setting aside fine cash

HONG KONG, Feb 26 — Standard Chartered’s pre-tax profit surged to US$3.9 billion (RM15.8 billion) in 2018, the bank said today, after previously warning it had set aside nearly US$1 billion for regulatory fines in the US and Britain. The…


Axiata’s exit from Singaporean market ‘not surprising’

KUCHING: Axiata Group’s recent exit from Singapore’s telco market by accepting the offer to sell its 29.7 per cent-owned equity stake in SGX-listed M1 Tlecommunications asset came as no surprise to analysts. Researchers at AmInvestment Bank Bhd (AmInvestment Bank) said that Axiata Group’s exit was expected, thanks to the increasingly challenging and competitive market conditions […]


Islamic capital market valued at RM1.88t for 2018, says SC

KUALA LUMPUR, Feb 18 — The Malaysian Islamic capital market for 2018 was valued at RM1.88 trillion, representing approximately 61 per cent of the country’s overall capital market, says Securities Commission (SC) chairman Datuk Syed Zaid Albar….