THE government’s move to abandon the previously planned High-Value Goods Tax (HVGT), originally slated for implementation in May 2024, is not expected to undermine its revenue target of RM700 million, said Professor Dr Yeah Kim Leng, an economist at Sunway University.
Bernama cited Dr Yeah saying the principles underpinning HVGT have already been absorbed into the revised SST structure, under which discretionary and luxury items are now taxed at five or ten per cent.
This integration, he said, has removed ambiguity over which goods qualify as high-value.
"The revenue target will not be affected because the same SST rates are being applied without the need to categorise specific items as high-value," he said.
The Ministry of Finance (MOF), in a written parliamentary response on Tuesday, confirmed that the government would no longer proceed with HVGT implementation. However, the tax principle remains intact under the revised SST model.
Dr Yeah said this approach is likely to allay concerns about the potential impact of such a tax on consumer spending and tourism, as the harmonisation within the SST framework ensures consistency and clarity in application.
The HVGT was first introduced in the revised 2023 Budget, tabled by Prime Minister Datuk Seri Anwar Ibrahim in February last year. It was initially proposed with tax rates ranging from five to ten per cent and was expected to generate an additional RM700 million in annual revenue. - July 30, 2025
