MALAYSIA is gearing up for the implementation of a new tax on high-value goods starting from May 1, 2024, announced Finance Minister Datuk Seri Anwar Ibrahim.
The High-Value Goods Tax (HVGT) is in its final policy stages and will necessitate the creation of new laws to be enforced.
“The mechanism, the goods involved, and the tax rate will be announced once the matter is finalised by the cabinet,” said Anwar in a written reply to Kampar MP Chong Zhemin.
The HVGT was first introduced by Anwar, who is also the Prime Minister, during his Budget 2024 speech, aiming to target high-end items including jewelry, watches, private jets, yachts and luxury cars. Tourists, however, will have the opportunity to obtain a refund on this tax providing some relief for international travellers.
The tax is expected to be applied to cars sold above RM200,000, watches priced above RM20,000, and jewelry valued above RM10,000, according to news portal The Star on Oct 27. These thresholds and the items subject to the tax were outlined in documents meant to gather feedback from the respective industries.
Moreover, Anwar has also clarified to Tangjung Karang MP Zulkafperi Hanapi that the government has no immediate plans to reinstate the goods and services tax (GST). He emphasised that any changes in taxation policies would be made in consideration of the country’s economic conditions and the concerns related to the cost of living.
“Any change in taxation policies will take into account the state of the economy and cost-of-living issues. The government will always monitor the state of the economy and suggest fiscal measures that are suitable for the short and medium term.”
Furthermore, the introduction of the HVGT represents a significant move by the Malaysian government to generate revenue and address economic challenges while targeting luxury goods and high-value assets in the market. – Nov 2, 2023
Main photo credit: Utusan
