Malaysians fume over new cheap goods tax amid already higher cost burden: ‘can’t even buy underwear’
- The 10 per cent Low Value Goods tax for online items kicked in two months before the hike in Malaysia’s sales and services tax to 8 per cent
- Prices will be pushed up ‘artificially’ and hurt Malaysian customers due to the LVG tax, an economist says
A Low Value Goods (LVG) tax took effect on January 1, imposing a 10 per cent levy on imported goods worth 500 ringgit (US$107) or less that are sold through various e-commerce sites.
But local consumers are not having it, with many arguing that the tax would only be an additional burden as they contend with stubbornly high living costs and an impending hike to the country’s sales and services tax (SST), which the government will raise to 8 per cent in March after keeping it at 6 per cent since 2018.
“Yes, just tax us until we are not even able to buy underwear,” read one comment from a Facebook user in reply to a post about the LVG tax.
The LVG tax – which covers everything from cosmetics to knick-knacks and household items sold online – is estimated to rake in 200 million ringgit in annual revenue for the government. It was initially set for an April 2023 launch, but Prime Minister Anwar Ibrahim postponed it after an outcry from the public and small-time online traders.
