KUALA LUMPUR – The luxury goods tax currently being fine-tuned will not affect the country’s tourism sector, said Deputy Finance Minister II Steven Sim.
He said travellers come to Malaysia for its interesting tourism destinations, national heritage sites, and to buy local handicrafts – not to shop for luxury goods.
“At the same time, they also get tax relief on the purchase of Malaysian handicrafts. If we look at it from that perspective, we are actually encouraging more people to come,” he told reporters in the lobby of the Parliament building today.
He was commenting on former prime minister Datuk Seri Ismail Sabri Yaakob’s call for the government to reconsider implementing the luxury goods tax as it would deter tourists who come for shopping.
According to Sim, the tax intends to extend the country’s tax revenues and create a more progressive taxation system without causing the industry to suffer.
“We are engaging with all stakeholders, including the retail and tourism sectors to see how the impact can be reduced,” he said.
Sim said the tax only applies to items classified as luxury goods and does not involve essential goods such as food and mobile phones.
In Budget 2023, prime minister and finance minister Datuk Seri Anwar Ibrahim proposed introducing the luxury goods tax from this year – including on watches and fashion items – which he said would increase national revenue. – Bernama, March 15, 2023
