Low-Value Goods Tax Postponed Indefinitely
Shoppers can breathe a sigh of relief as the Royal Malaysian Customs Department has announced that the low-value goods tax (LVG) which was set to take effect on 1 April 2023 has been postponed indefinitely.
According to an announcement on its website, the customs department said the implementation of the tax had been postponed “to a date to be determined later”.
The 10% LVG tax was first announced during the original tabling of Budget 2023 last year. It was scheduled to be imposed on all goods purchased online and delivered to Malaysia from overseas by vendors registered with the Finance Ministry. The tax was originally intended to be applied on goods with a value of RM500 and under.
This comes after a proposed amendment to the Sales Tax Act 2018 to tax LVG sales through the Sales Tax (Amendment) Bill 2022 on Aug 1 last year.
The intent of the LVG tax is intended to empower local markets and businesses by ensuring equal treatment for both locally manufactured and imported goods, as Malaysian manufacturers are taxed by 5% or 10% on sales.
While new to Malaysians, this type of tax is not really new. Countries like Singapore and Australia currently have some form of taxation on these types of goods under their respective Goods and Services Tax (GST) regime.
Read More: How Much Do You Know About The Digital Tax In Malaysia?
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