Malaysia

Govt scraps luxury goods tax without impacting RM700 million revenue projection

The decision to shelve the proposed HVGT will not affect projected revenue gain as the tax has effectively been integrated into the expanded Sales and Services Tax (SST) framework

Updated 1 year ago · Published on 30 Jul 2025 6:23PM

Govt scraps luxury goods tax without impacting RM700 million revenue projection
National revenue unaffected despite policy shift, say Economist - July 30, 2025

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

Spotlight

World

Kim Jong Un appears in state media photos after unverified death rumours

Malaysia

Anwar challenges Rafizi over corporate crime, asks why he stayed silent as minister

Malaysia

AKPS chief Mohd Shuhaily to be charged over alleged assault on two policemen

Malaysia

Year One pupil dies after breathing difficulties in Dengkil classroom

Malaysia

College student remanded for three days over alleged rape of underage girl

Sports & Fitness

Lee Zii Jia settles dispute with father, sister over company affairs

By Alfian Z.M. Tahir

Malaysia

Online scam call centres: Police detain 31 people targeting foreign victims in Pahang crackdown

Malaysia

Guan Eng proposes RM1,000 tax rebate for purchase of air purifiers

By Ian McIntyre

You may be interested

Malaysia

Animal welfare group urges probe into alleged sexual abuse of cat in viral video

Malaysia

Guan Eng proposes RM1,000 tax rebate for purchase of air purifiers

By Ian McIntyre

Malaysia

MCMC seizes phone in probe into Threads post on Negeri Sembilan ruler

Malaysia

PN vows court fight against deregistration with Melaka polls 11 days from nomination

Malaysia

Takiyuddin’s use of ‘munafik’ sparks Dewan Rakyat row

Malaysia

Oil prices ease but supply risks persist

Malaysia

Fadhlina takes legal action over video of 2023 Parliament speech

By Alfian Z.M. Tahir

Malaysia

Lower-income Malaysians make up 70% of BNPL users as financing hits RM6.6b