KUALA LUMPUR – The proposed amendments to the Sales Tax (Amendment) Bill 2022, which will see taxes imposed on imported low-value goods (LVG) under RM500, is meant to provide a level playing field to local sellers and manufacturers, said Deputy Finance Minister Datuk Mohd Shahar Abdullah.
Speaking during the second reading of the bill in the Dewan Rakyat today, Shahar explained that the new tax is also crucial to plug a loophole under the current tax regime.
The proposed sales tax is also placed at a flat rate of 10%.
“At the moment imported goods under RM500 are not taxed, which led to an uneven playing field for local sellers as local goods are taxed.
“Apart from an unfairness to local sellers, this de minimis facility is often abused by certain parties, for example, goods valued higher than RM500 are listed as lower to avoid paying tax or duty which led to a loss of revenue to the government,” he said.
The de minimis rate is the price threshold below which fewer or no taxes are charged on shipments entering the country. In Malaysia, the de minimis rate is RM500.
Shahar explained that 1922 cases of de minimis violation have been recorded by the Royal Malaysian Customs Department in 2020.
He also said the new tax is part of the government’s effort to broaden its revenue as detailed in its announcement of the proposed bill during Budget 2022.
The proposed bill, if passed is expected to come into effect in January 2023. – The Vibes, August 4, 2022
.jpg)
.jpeg)
