Wednesday, February 8, 2023

Starting April, M’sians need to pay 10% additional for purchasing overseas goods priced below RM500

NewsStarting April, M'sians need to pay 10% additional for purchasing overseas goods...

Starting April this year, Malaysians would need to pay an additional 10% sales tax when they buy goods imported from overseas that are priced lower than RM500.

The Lower Value Goods (LVG) tax was first announced on 1 August 2022, following a proposed amendment to the Sales Tax Act 2018 to tax LVG sales through the Sales Tax (Amendment) Bill 2022.

However, the implementation of the tax had been left up in the air until the latest announcement on 6 January.

In a statement, the Royal Malaysian Customs Department said the legislation on charging and levying LVG would come into effect in April this year, even though it has been enforced since 1 January.

Items purchased before April 2023 would be exempted from this tax, and the 10% tax would only apply to the price of goods below RM500.

At the same time, tax exemptions would also apply for some imported goods and these items include cigarettes and tobacco products, smoking pipes, including pipe bowls, e-cigarettes and vapes, non-nicotine liquid or gel preparations used for smoking via e-cigarettes or vaping devices, and liquor products.

Source: iStock

Move to encourage Malaysians buy locally-made products

According to The Sun Daily, Thannees Tax Consulting Services managing director SM Thanneermalai shared that this move is aimed at levelling the playing field between overseas online sellers and local manufacturers, who are currently subject to a 5% to 10% sales tax for items sold.

This would then encourage Malaysians to purchase locally-made products instead.

Meanwhile, LVG sellers are responsible for acquiring ‘Registered Seller’ (RS) status with the Customs Department.

Registration will be required for both Malaysian citizens and foreigners who deal in low-value goods brought into the country via land, sea or air, and exceeds RM500,000 in total sales value within 12 months.

Sellers were also required to display details of their low-value goods on all packages that come into the country.

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