Fahmi dismisses widespread tax rumours linked to LVG

COMMUNICATIONS Minister Fahmi Fadzil today clarified on the X platform that the low-value goods tax (LVG) applies only to imported goods, contrary to a massive confusion that wants the tax to apply to all goods bought online.

(This applies to imported goods only. Local products are not subjected to the tax.)

Fahmi commented on an Astro Awani link on the X platform that says the tax will apply to goods purchased online. The article headline omitted the source of the goods.

The unpopular move to tax online purchases below RM500 has been the subject of scrutiny in recent days.

This levy, detailed in the Royal Malaysian Customs Department’s recent guidelines, covers low-value items brought into the country via various means except for alcohol or smoking products. The tax applies to all online sellers, regardless of their location, selling LVG (goods priced below RM500) on digital platforms.

Implementation is scheduled for Jan 1, 2024, excluding LVG ordered before that date, even if delivered afterwards.

However, purchases made after Jan 1 will incur the tax. The 10% sales tax is specifically on the sales value of LVG, excluding additional fees like transportation or insurance.

Each LVG priced under RM500 will be subject to the 10% levy, irrespective of combined purchases, closing any loophole to surpass the tax threshold.

Following that, netizens are complaining that this will have some effects on their day-to-day lives. Twitter user Sharan Pretam Singh (Mrs) @PretamSharan stated:

However, some see the tax as a good initiative for local consumer goods, as it may get Malaysians to purchase local products instead of imported goods.

(Good news like this should be accepted. Please purchase Malaysian-made products. Proudly Made in Malaysia.)

Regardless, there are plenty who are still confused about the definition of what will be taxed. – Dec 17, 2023

Main photo credit:Β Bernama


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