KUALA LUMPUR – Deputy Finance Minister Lim Hui Ying has confirmed that the high-value goods tax (HVGT), which was set to go into effect on May 1, has been postponed.
This decision has been welcomed by industry players and stakeholders, citing the need for further engagement before its enactment.
“The government needs to continue engaging with the industry to ensure the tax principles and legislation are carefully formulated and drafted,” Lim told the Star yesterday.
“The government will announce the HVGT’s new implementation date later.
Lim highlighted that the ministry is in the final stages of refining certain matters related to the tax structure, such as the categorisation of goods as “high-value”, threshold determination, and tax rates.
“HVGT will only be imposed on certain goods categorised as high-value. The determination of a high value is based on the set threshold,” she clarified.
Lim assured that low-income groups would not be significantly affected by the implementation of HVGT as they are unlikely to purchase high-value goods.
Additionally, measures such as the Tourist Refund Scheme will be implemented to mitigate the impact on economic activities, especially in the tourism sector.
“Foreign tourists who purchase high-value goods in Malaysia can claim a tax refund at international airports before departure, subject to the prescribed procedures and conditions,” she explained.
Furthermore, designated areas including Labuan, Langkawi, Pangkor, and Tioman, as well as special areas such as free zones and licenced warehouses, will be exempt from HVGT, she said.
Lim emphasised the inclusivity of the ministry in formulating the HVGT policy, saying that industry views and stakeholders’ feedback will be solicited through more meetings to consider various aspects, including its impact on the economy, businesses, and cost of living.
The HVGT bill, initially slated to be passed in the recent Parliament meeting, is expected to be tabled in the next session scheduled from June 24 to July 18.
Meanwhile, according to the NST, the delay in the HVGT bill presentation to Parliament has led to the postponement of its implementation. The tax, also known as the luxury goods tax, was expected to take effect on May 1, pending approval.
The bill’s delay, as reported by The Edge, stems from disagreements over the definition of “high-value goods” and the price range of items subject to the tax, despite dialogues and consultations with retail industry players and tax professionals. – March 29, 2024