Latest news with #Budget2023
Barnama
31-07-2025
- Business
- Barnama
Scrapping High-Value Goods Tax Will Not Affect RM700 Mln Revenue Target
Credit: Unsplash Scrapping High-Value Goods Tax Will Not Affect RM700 Mln Revenue Target – Economist By Niam Seet Wei KUALA LUMPUR, July 30 (Bernama) -- The government's decision to halt the proposed high-value goods tax (HVGT), formerly known as the luxury goods tax, will not affect the RM700 million tax revenue expected from its implementation, said an economist. Sunway University economics professor Dr Yeah Kim Leng said the move will instead ease concerns over the potential impact of the tax on consumer and tourist spending, as its incorporation into the existing expanded Sales and Service Tax (SST) has removed uncertainty over which items are subject to tax. He explained that since the principles of the HVGT have been integrated into the expanded SST structure, where luxury and discretionary items are now taxed at five or 10 per cent, the rates are effectively the same as those proposed for the HVGT in Budget 2023. 'The revenue target will not be affected as the same SST rate will be applied without the need to define which goods are considered high value,' Yeah told Bernama. The Ministry of Finance (MOF), in a written parliamentary reply on Tuesday, said the government has decided not to proceed with the HVGT implementation. However, it said the principles of the HVGT have been retained under the revised sales tax structure, where luxury and discretionary goods are now taxed at five or 10 per cent. The HVGT was first introduced in the revised Budget 2023, tabled by Prime Minister Datuk Seri Anwar Ibrahim in February 2023. HVGT was initially scheduled for implementation in May 2024 with the proposed tax rates ranging from five per cent to 10 per cent. The government projected that this tax would generate an additional RM700 million in annual revenue. -- BERNAMA
Daily Express
31-07-2025
- Business
- Daily Express
Government cancels tax on luxury goods
Published on: Thursday, July 31, 2025 Published on: Thu, Jul 31, 2025 By: Bernama Text Size: Kuala Lumpur: The government has decided not to proceed with the implementation of the high-value goods tax (HVGT), according to the Finance Ministry (MOF). In a written reply on the Parliament website, the MOF stated, however, that the principles of the HVGT have been incorporated into the revised sales tax structure, with luxury and discretionary items taxed at five or 10 per cent. The ministry said this in response to a question from Datuk Shamshulkahar Mohd Deli (BN-Jempol), who asked about the projected rise in national revenue resulting from fiscal reform measures, including the introduction of HVGT, the digital goods tax, capital gains tax (CGT), low-value goods tax, and the expansion of the SST tax and subsidy rationalisation that are being or will be implemented. The proposal to introduce HVGT was first announced at the revised presentation of Budget 2023 in February 2023. Initially planned to be implemented by May 2024, the government had expected to generate an additional RM700 million annually from it. However, the government at that time indicated that more time was needed to engage with relevant stakeholders to ensure its effective implementation without negatively impacting the economy. Meanwhile, the MOF said the government has taken several steps under direct and indirect taxation to strengthen national revenue collection. Among them is the implementation of the CGT, effective March 1, 2024. 'Based on the current transaction volume and value involving unlisted shares, the government estimates revenue collection of about RM800 million a year,' it said. The sales tax rate revision and the expanded scope of the service tax, effective July 1 2025, are also expected to contribute an additional RM5 billion revenue in 2025, doubling to RM10 billion in 2026. As for diesel subsidy targeting, it has so far generated RM600 million in monthly government savings. Additionally, the low-value goods tax, effective Jan 1, 2024, recorded a collection of about RM500 million for the year 2024. The government's decision to halt the proposed high-value goods tax (HVGT), formerly known as the luxury goods tax, will not affect the RM700 million tax revenue expected from its implementation, said an economist. Sunway University economics professor Dr Yeah Kim Leng said the move will instead ease concerns over the potential impact of the tax on consumer and tourist spending, as its incorporation into the existing expanded Sales and Service Tax (SST) has removed uncertainty over which items are subject to tax. He explained that since the principles of the HVGT have been integrated into the expanded SST structure, where luxury and discretionary items are now taxed at five or 10 per cent, the rates are effectively the same as those proposed for the HVGT in Budget 2023. 'The revenue target will not be affected as the same SST rate will be applied without the need to define which goods are considered high value,' Yeah told Bernama. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
The Star
30-07-2025
- Business
- The Star
Scrapping High-Value Goods Tax - the good and the bad
Photo: GLENN GUAN/The Star PETALING JAYA: The decision to scrap the High-Value Goods Tax (HVGT) has brought mixed reactions, highlighting the complexities of balancing tax policy with economic growth. While some see it as unfair to tax common folk while bringing relief to the rich, others feel it would help the economy and prevent cases of double taxation. This reflects a missed opportunity to address deeper questions of tax fairness and structural reform, the Federation of Malaysian Consumers Associations (Fomca) claimed. 'From a consumer perspective, the decision to cancel the luxury goods tax may come as a relief, especially after the recent SST (sales and service tax) hike,' said Fomca secretary-general Dr T. Saravanan. However, he added that the implication is significant from a structural point of view. 'A luxury tax, even if it only adds a small amount to national income, would help widen the government's sources of revenue and reduce reliance on taxes like the SST, which affects all Malaysians,' he said yesterday. 'By scrapping the luxury tax but still taxing basic goods, the government may seem unfair, with lower income people paying more tax compared to what they can afford,' he added. Similarly, Malaysian Consumer Friendly Organisation vice-president Azlin Othman said the decision raises questions as to why the wealthy are not taxed more, while lower- and middle-income groups still have to pay taxes on basic items. Azlin said cancelling the luxury tax would also reduce government income, which could have been used for public welfare or development. 'Even if the luxury tax doesn't bring in a lot, it's still a valid source of income from the top 20%,' she said. The HVGT was initially slated to commence on May 1, 2024, after it was tabled during Budget 2023. However, the government has revealed at the Dewan Rakyat that the plan had been scrapped. Economist Prof Dr Ida Yasin believes the tax on luxury items should be maintained with a refined mechanism. The tax could be targeted at tourists, she said. 'When tourists come to our country, besides sightseeing, they also shop,' she added. While the HVGT would target people with higher income, she said its effectiveness was still questionable. 'If the tax is introduced, it might lead to rich individuals buying luxury goods abroad,' she said. Tax expert Datuk Koong Lin Loong is one of those who welcomed the government's move, saying it would give a positive signal to the market on Malaysia's robust tax policies. He said it would be good for the economy as it would also remove the potential of multiple taxes. 'Removing HVGT can avoid double taxation on goods,' he said. It would also help the government save resources that could be used for other purposes. Another tax expert, Thenesh Kannaa, said the Malaysian tax system needs simplification, not the introduction of new ones. 'Intuitively, one may think the luxury goods tax is an effective way to tax the rich to meet the country's fiscal needs ... but it's not that simple. 'Imposition of a special tax on luxury watches sold in retail outlets here does not prevent Malaysians from buying the same item overseas,' he said, adding that this would only hurt the local industry. He believes the government's decision was made based on the costs and benefits for collective well-being.
Sinar Daily
30-07-2025
- Business
- Sinar Daily
Government cancels high-value goods tax implementation
The proposal to introduce HVGT was first announced at the revised presentation of Budget 2023 in February 2023. 30 Jul 2025 10:08am In a written reply on the Parliament website yesterday, the MOF stated, however, that the principles of the HVGT have been incorporated into the revised sales tax structure, with luxury and discretionary items taxed at five or 10 per cent. KUALA LUMPUR - The government has decided not to proceed with the implementation of the high-value goods tax (HVGT), according to the Finance Ministry (MOF). In a written reply on the Parliament website yesterday, the MOF stated, however, that the principles of the HVGT have been incorporated into the revised sales tax structure, with luxury and discretionary items taxed at five or 10 per cent. The ministry said this in response to a question from Datuk Shamshulkahar Mohd Deli (BN-Jempol), who asked about the projected rise in national revenue resulting from fiscal reform measures, including the introduction of HVGT, the digital goods tax, capital gains tax (CGT), low-value goods tax, and the expansion of the SST tax and subsidy rationalisation that are being or will be implemented. The proposal to introduce HVGT was first announced at the revised presentation of Budget 2023 in February 2023. Initially planned to be implemented by May 2024, the government had expected to generate an additional RM700 million annually from it. However, the government at that time indicated that more time was needed to engage with relevant stakeholders to ensure its effective implementation without negatively impacting the economy. Meanwhile, the MOF said the government has taken several steps under direct and indirect taxation to strengthen national revenue collection. Among them is the implementation of the CGT, effective March 1, 2024. "Based on the current transaction volume and value involving unlisted shares, the government estimates revenue collection of about RM800 million a year,' it said. The sales tax rate revision and the expanded scope of the service tax, effective July 1 2025, are also expected to contribute an additional RM5 billion revenue in 2025, doubling to RM10 billion in 2026. As for diesel subsidy targeting, it has so far generated RM600 million in monthly government savings. Additionally, the low-value goods tax, effective Jan 1, 2024, recorded a collection of about RM500 million for the year 2024. - BERNAMA More Like This
The Sun
30-07-2025
- Business
- The Sun
Govt scraps high-value goods tax, adjusts sales tax rates
KUALA LUMPUR: The government has decided not to proceed with the implementation of the high-value goods tax (HVGT), according to the Finance Ministry (MOF). In a written reply on the Parliament website yesterday, the MOF stated, however, that the principles of the HVGT have been incorporated into the revised sales tax structure, with luxury and discretionary items taxed at five or 10 per cent. The ministry said this in response to a question from Datuk Shamshulkahar Mohd Deli (BN-Jempol), who asked about the projected rise in national revenue resulting from fiscal reform measures, including the introduction of HVGT, the digital goods tax, capital gains tax (CGT), low-value goods tax, and the expansion of the SST tax and subsidy rationalisation that are being or will be implemented. The proposal to introduce HVGT was first announced at the revised presentation of Budget 2023 in February 2023. Initially planned to be implemented by May 2024, the government had expected to generate an additional RM700 million annually from it. However, the government at that time indicated that more time was needed to engage with relevant stakeholders to ensure its effective implementation without negatively impacting the economy. Meanwhile, the MOF said the government has taken several steps under direct and indirect taxation to strengthen national revenue collection. Among them is the implementation of the CGT, effective March 1, 2024. 'Based on the current transaction volume and value involving unlisted shares, the government estimates revenue collection of about RM800 million a year,' it said. The sales tax rate revision and the expanded scope of the service tax, effective July 1 2025, are also expected to contribute an additional RM5 billion revenue in 2025, doubling to RM10 billion in 2026. As for diesel subsidy targeting, it has so far generated RM600 million in monthly government savings. Additionally, the low-value goods tax, effective Jan 1, 2024, recorded a collection of about RM500 million for the year 2024. - Bernama
