Shopee’s parent company, Sea Limited (Malaysia), has expressed its support for the government’s implementation of the 10% low-value goods (LVG) tax, which came into effect earlier on 1 January 2024. Additionally, it foresees that the tax will provide a significant boon to the local micro, small, and medium enterprises (MSMEs).

In a statement, Sea Limited explained that the new tax – which is applied to imported items that cost less than RM500 – will level the playing field for the local MSME sector, enabling local sellers to market their goods more competitively. This is because imported low-value goods were previously not subjected to any taxes, thereby allowing these items to be sold at a cheaper price. Local products, meanwhile, are subjected to the 6% sales and services (SST), resulting in a higher cost.

“If you’ve recently made a purchase on Shopee, you might have seen our new notice about this tax. At Shopee, we prioritise transparency for our users, and we are the first e-commerce platform to inform our users about the LVG tax,” said the country head of Sea Limited (Malaysia), Terence Siau, who also commented that this potential boost to local MSMEs will lead to the creation of job opportunities and a better sustained domestic economy.

Siau further emphasised that Shopee is committed to its responsibility to help Malaysian sellers and made-in-Malaysia products thrive. As such, the e-commerce platform will continue to provide access to a variety of local goods on different price scales, ensuring that they are easily discoverable on the platform.

“Through Shopee, we are enabling MSMEs, especially the local brick-and-mortar operations in small-town and rural communities to succeed in a digital-first world, connecting them to more customers beyond big cities,” Siau said, although he also highlighted the importance of allocating ample time for the actual implementation of any tax regimes moving forward. This is so that the public – including both the sellers and consumers – can prepare for the changes.

For context, the LVG tax was originally introduced during the tabling of Budget 2022, slated for implementation on 1 January 2023. This was, however, postponed a number of times, until RMCD eventually announced in mid-December 2023 that the tax will be implemented on 1 January 2024.

It is also worth noting that the LVG tax is not exclusive to Malaysia; several other nations, too, have already adopted similar measures within their tax frameworks. Singapore, for instance, imposes a 9% GST to items valued at SG$400 and below that are imported via air or post. Meanwhile, Australia currently levies a 10% GST on imported low-value goods of AU$1,000 or less.

• TAGS:
• E-Commerce
• E-Commerce Platforms
• Low-Value Goods (LVG)
• LVG Tax
• Sea Limited
• Shopee
• Terence Siau