Malaysia delays implementation of luxury goods tax to study its effect on economy, cost of living

Deputy Finance Minister Lim Hui Ying said the government needed more time to engage with the industry to carefully formulate the tax principles

Malaysia had planned to roll out the measure, which stakeholders said would not become a significant contributor to the tax base, from May 1

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A clothing outlet at a shopping mall in Kuala Lumpur. Malaysia has deferred the implementation of the high-value goods tax. Photo: AP

Published: 11:50am, 29 Mar 2024

The expected high-value goods tax (HVGT) has been put on hold from its May 1 implementation, much to the delight of Malaysia’s industry players and other stakeholders.

While the government said the delay is warranted by the need for more engagement, industry players said the HVGT would not become a significant contributor to the country’s tax base and have subsequently called for a better tax system in the form of the goods and services tax (GST).

Deputy Finance Minister Lim Hui Ying confirmed that the HVGT has been deferred.

“The government needs to continue engaging with the industry to ensure the tax principles and legislation can be formulated and drafted carefully.

“The government will announce the new implementation date of the HVGT later,” she said on Thursday.

The ministry, she said, is in the final stage of refining certain matters related to the tax structure, especially the type of goods categorised as “high-value”, threshold determination, and tax rates.