CONCERNS have been raised by an industry group that the impending imposition of luxury goods tax on gold products will negatively affect demand for gold jewellery in Malaysia.
Malaysia Gold Association (MGA) president Datuk Wira Louis Ng said the exports of gold jewellery which were affected severely during the COVID-19 pandemic and had only recovered in the recent times are bound for another fall when the impending luxury goods tax on gold products comes into force.
“This has raised concerns among gold players in Malaysia that MGA sees the needs for it to be urgently addressed prior to the official enforcement,” Ng who is also the Public Gold Group (PG Group) executive chairman pointed out in a media statement.
“At a high-level meeting with respective authorities hosted by the Royal Malaysia Customs Department (RMCD) in March this year, MGA had discussed about the impending enforcement of luxury goods tax on gold jewellery segment and analysed its impact on gold import and export activities, manufacturing, wholesale as well as retails such as domestic and tourism sales.”
Earlier, Ng who represented Malaysia at the Sixth Asia Pacific Precious Metals Conference 2023 (APPMC 2023) hosted by the Singapore Bullion Market Association (SBMA) from June 4-6 shared that Malaysia’s gold demand in recent years has been greatly impacted by the COVID-19 pandemic.
“As opposed to what many people thought, the demand for investment gold spiked during the movement control order (MCO) period due to rise in gold prices, implementation of government’s fiscal support programme, moratorium bank loans and social restrictions – all these contributed to more cash in hand for investors to stock up on physical gold,” he observed.
“However, gold demand dropped post-MCO due to economic recovery, decrease in investment sentiment, inflationary pressures and change in consumer preferences – more travels.”
More broadly, Ng revealed that the exports of gold jewellery on the other hand have been moderate since 2013 and remained low for several years after the implementation of the goods and service tax (GST) in 2015.
However, there was a slight increase in jewellery exports after GST was replaced with sales and services tax (SST) in 2018. “This was when gold products were given tax exemption but that did not last long,” added Ng. – June 19, 2023