IT has been revealed that the implementation of the High-Value Goods Tax (HVGT) has been postponed due to unresolved disputes surrounding the definition and criteria of “high-value goods”.
Quoting insider sources, The Edge highlighted that the tax’s progress has been hindered by the absence of a clear definition for “high-value goods” and the failure to establish a price range for taxable items.
Consultations and discussions had taken place previously but subsequent developments were lacking, leaving retailers in a state of uncertainty for over a year.
“There were some consultations and discussions done but then there was no news following that,” the report quoted a source as saying.
Moreover, the government did not present the HVGT bill in the Dewan Rakyat which adjourned sine die, signalling a halt in the tax’s progression.
Initially slated to be enforced by May 1, the HVGT was introduced in the revised 2023 Budget and further elaborated upon a year later. The proposed tax aimed to levy a 5% to 10% charge on luxury items with an estimated annual revenue boost of RM700 mil anticipated.
However, crucial details such as the criteria for taxable goods and the comprehensive range of items encompassed by the tax remained vague with only jewellery and watches explicitly mentioned thus far.
Former finance minister Lim Guan Eng recently urged the government to reassess its newly introduced taxes including the HVGT, in order to alleviate financial strains on both individuals and businesses.
The Bagan MP suggested deferring the implementation of the new taxes until more favourable economic growth conditions emerged projected by year-end.
Furthermore, the Malaysia Gold Association proposed a more lenient threshold of RM50,000 and a 5% tax rate for gold jewellery under the HVGT. – March 28, 2024
