Deputy Finance Minister Lim Hui Ying has confirmed that the implementation of the high-value goods tax (HVGT) will be deferred to a later date. It was originally slated to come into effect on 1 May 2024.

According to the deputy minister, the delay is attributed to the need for more engagement with industry stakeholders in a bid to be more inclusive. “The government needs to continue engaging with the industry to ensure the tax principles and legislation can be formulated and drafted carefully. The government will announce the new implementation date of the HVGT later,” she said.

In the meantime, Lim shared that the Finance Ministry is in the final stage of refining certain aspects related to the tax structure of the HVGT. These include the type of goods that should be categorised as high-value items, the threshold determination, and the tax rates that should be imposed.

“HVGT will only be imposed on certain goods categorised as high value. The determination of a high value is based on the set threshold. Fundamentally, low-income groups will not be affected by its implementation because they are unlikely to purchase high-value goods,” Lim further stated.

On the possibility of HVGT affecting the tourism sector, Lim said that foreign tourists will be allowed to claim tax refunds at international airports before departure, thereby reducing the impact the tax on such economic activities. “Furthermore, the HVGT will not be imposed in designated areas, including Labuan, Langkawi, Pangkor and Tioman, as well as special areas such as free zones and licensed warehouses,” she commented.

The idea of HVGT was first floated by Prime Minister Datuk Seri Anwar Ibrahim during the tabling of Budget 2023 back in February 2023, although it was presented then as the luxury goods tax. It was, however, not implemented, and was subsequently proposed again as the HVGT under Budget 2024, with a rate of 5% to 10%.

In proposing the new tax, the government said that it expects to be able to collect up to RM700 million in tax revenue a year. Industry players, however, disagreed, saying that the HVGT would not contribute significantly to the country’s tax base. Leading gold and jewellery brand, Tomei, for instance, urged the government to consider reinstating the goods and services tax (GST) instead, contending that “there are a lot of negative impacts” with regard to the HVGT.

(Source: The Star)

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• High-Value Goods Tax
• Lim Hui Ying
• Luxury Goods
• Luxury Goods Tax