KUALA LUMPUR – Former prime minister Datuk Seri Ismail Sabri Yaakob (Bera-BN) has urged the government to review the proposed luxury tax which was announced by Finance Minister Datuk Seri Anwar Ibrahim during the tabling of Budget 2023.
Debating the supply bill, Ismail Sabri said that reducing the luxury goods tax will be akin to welcoming foreigners to choose Malaysia as their shopping destination.
The previous administration had to reduce this tax, in a bid to make Malaysia a shopping haven while making good engagement with the neighbouring countries.
“The shopping activities of foreign tourists contributed as much as 30% of the RM86.1 billion in national tourism revenue in 2019.
“By imposing the luxury tax, the foreign travellers will be coming to Malaysia to spend money and shop other than just visiting natural spots such as beaches and forests,” he said during the debate session.
He hoped that the government will be taking this matter into consideration to draw more tourists to Malaysia.
“The neighbouring countries compete to captivate travellers and want to make their countries the place of interest for them to shop there.
“Indonesia and Thailand are among those that sell luxury goods for low prices,” he added.
He also said that this move will benefit the country because the currency exchange and reduced taxation would subsequently reduce the price of goods, making Malaysia more viable for tourists.
Additionally, the Bera MP cited the United Kingdom as an example of how the introduction of a similar luxury goods tax had affected their revenue from shopping by foreign travellers.
“The government needs to be careful in the implementation of this tax. For example, the retail sector in the UK was hit hard when the government introduced a tax on luxury goods.
“According to a Wall Street Journal report, foreign tourists, especially from the United States, choose Paris and Milan as shopping locations over London,” he cited.
Earlier, the prime minister announced the luxury items that will be taxed include luxury watches and expensive fashion items during the tabling of Budget 2023. – The Vibes, March 7, 2023.
