High-value goods tax: Govt engaging stakeholders to finalise details

The government has continued to engage with relevant stakeholders to finalise details of the high-value goods tax (HVGT), including the scope of goods and associated thresholds.

This is to ensure the effectiveness of the tax without adversely affecting the people’s economy, said the Finance Ministry.

“Ultimately, the government aims to strike a delicate balance between improving the country’s fiscal position and avoiding placing undue burden on the rakyat.

“The fiscal reforms will also provide more room for the government to enhance the rakyat’s well-being and social safety by increasing spending on critical public infrastructure and services such as education and healthcare,” it said in a statement today in response to questions on the deferment of the HVGT (previously known as luxury goods tax).

The HVGT, which ranges between 5.0 and 10 percent - was initially planned to be tabled at the just concluded parliamentary session that ended on March 27 to enable the implementation of the tax by May.

However, the ministry did not table the bill during the session.

The Parliament will reconvene from June 24 to July 18.

Meanwhile, the ministry reiterated that the government is committed to implementing fiscal reforms through subsidy rationalisation and expansion of the tax base.

This is to strengthen Malaysia’s economic prowess and rehabilitate the government’s fiscal position as envisioned in the Madani Economy framework.

“The government will take a measured and progressive approach in doing so to ensure that these measures will not burden the low- and middle-income population,” it said.

According to the ministry, this was reflected in the rationalisation of electricity subsidies in January, where 85 percent of electricity consumers did not face any increase in tariffs.

Additionally, the implementation of the capital gains tax in March exclusively targeted companies, sparing individuals from its effects.

Furthermore, adjustments to the service tax, such as exemptions in specific sectors, were introduced to alleviate the strain on the cost of living, it added.

- Bernama

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