THE implementation of the High Value Goods Tax (HVGT), initially scheduled to take effect on May 1, 2024, has been postponed, the Dewan Rakyat was informed.
The Finance Ministry explained that the delay is due to the government prioritising other fiscal reforms that were introduced last year, such as the Low Value Goods Tax and targeted diesel subsidies.
In a written reply published on the Parliament’s websited on Thursday, Feb 27, the Ministry clarified that the HVGT's postponement is part of a broader strategy to focus on the immediate impacts of these other reforms, which have already been rolled out.
“Given the current priorities, including the implementation of the Low Value Goods Tax and targeted diesel subsidies, the government has decided to defer the implementation of the HVGT,” the Ministry stated.
“However, we will continue to evaluate the feasibility and approach of imposing a sales tax on high-value goods as part of the ongoing review of the rates and scope of the Sales and Service Tax (SST), as outlined in Budget 2025.”
The Ministry added the development of policies and legislation for any new taxes must be approached with caution and thorough consideration. The HVGT, in particular, will require careful drafting to ensure its effectiveness and fairness.
“Any new tax policy, including the HVGT, must be designed with careful attention to detail,” the Ministry added. “This approach will ensure a more holistic and efficient tax system that upholds the principles of social justice, economics, and the welfare of the people.”
The Ministry’s response followed a question by Wan Ahmad Fayshal Wan Ahmad Kamal, the Member of Parliament for Machang (PN-Machang), who sought an update on the status of the HVGT.
Although initially slated for introduction in May 2024, the government’s decision to defer the HVGT reflects its cautious approach in implementing new tax measures, ensuring that they align with broader fiscal goals and contribute positively to the economy and society. – February 27, 2025