The High-Value Goods Tax (HVGT), which was supposed to be implemented from May 1, 2024, has been put on hold. It was reported that this is due to the finance ministry’s postponement in presenting the bill to parliament.
According to The Edge, the delay in the bill was due to disagreements over the definition of “high-value goods” and the price range of items that would be subject to the tax, this despite dialogues and consultations having been made with retail industry players and tax professionals.
The deferment of the new tax, which is to be imposed on luxury or big-ticket items at a rate of between 5% and 10% as announced during the tabling of Budget 2024, was confirmed by deputy finance minister Lim Hui Ying, who told The Star that the government will continue engaging with the industry to ensure the tax principles and legislation can be formulated and drafted carefully.
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” as well as the threshold determination and tax rates.
“HVGT will only be imposed on certain goods categorised as high value. Fundamentally, low-income groups will not be affected by its implementation because they are unlikely to purchase high-value goods,” she said in a written reply to the news publication.
“The government will announce the new implementation date of the HVGT later,” she said. She added that the HVGT will not be imposed in designated areas including Labuan, Langkawi, Pangkor and Tioman, as well as special areas such as free zones and licensed warehouses. Langkawi is of course a haven for supercars, not always in a good way.
Initially, it was stated that jewellery over RM10,000, watches above RM20,000 and cars priced beyond RM200,000 would be subject to the HVGT. However, it was not detailed how this would be applied, and how the thresholds would be defined.
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AI-generated Summary ✨
Comments express frustration over the delay of the High-Value Goods Tax, highlighting concerns that it unfairly impacts the B40 group while benefiting the wealthy. Many believe the tax will raise prices, encourage outflow of spending abroad, and harm local employment, especially in luxury outlets. There is skepticism about the government's intentions, with some accusing it of favoring the rich and censored comments criticizing the perceived unfairness. Overall, sentiments reflect opposition to the tax and concern over its economic consequences.