High-value goods tax on hold amid disagreement, says report
Published on: Thursday, March 28, 2024
By: FMT
The implementation of the high-value goods tax has been put on hold after certain quarters requested that it be postponed and called for more discussions on what it should cover. (Bernama pic)
PETALING JAYA: The implementation of the high-value goods tax (HVGT) is on hold due to unresolved disagreements over the criteria and definition of “high-value goods”, according to a report by a business daily.
Quoting sources, The Edge said the tax was held up because “high-value goods” were not defined and the price range for taxable items had not been set.
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“There were some consultations and discussions done but then there was no news following that,” the report quoted a source as saying.
The report also claimed that the lack of clarity had left retailers in the lurch for more than a year.
The government did not table the HVGT bill in the Dewan Rakyat, which adjourned yesterday until June 24. The tax had been slated to come into force on May 1.
The HGVT was originally announced in the revised 2023 budget and further detailed one year later.
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It aimed to impose a 5% to 10% tax on luxury items and was expected to generate an additional RM700 million in annual revenue.
However, specifics about the tax, including the criteria for taxable goods and the range of items it would cover, have been scant, with only jewellery and watches explicitly mentioned so far.
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Earlier this month, former finance minister Lim Guan Eng called on the government to review its newly introduced taxes, including the HVGT, to reduce the financial burden on the people and businesses.
Lim said the new taxes should be deferred until there was more favourable economic growth, expected by the end of the year.
In light of these concerns, the Malaysia Gold Association recently also proposed a more lenient threshold of RM50,000 and a 5% tax rate for gold jewellery under the HVGT.
FMT has reached out to the finance ministry for comment.
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