The government has decided not to proceed with the implementation of the high-value goods tax (HVGT).
According to a report by Harian Metro, the Ministry of Finance (MOF) has shared that the principle for the imposition of the HVGT was applied in the review of sales tax, meaning that luxury goods are taxed at a rate of 5% to 10%.
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The proposal to introduce the HVGT was first brought up in the re-tabulation of Budget 2023 in February 2023. The HVGT range between 5% and 10% was initially planned to be implemented by May 2024, and the government expected to generate an additional RM700 million annually from it.
However, the government at that time stated that it needed time to consult with relevant stakeholders to ensure that the implementation of the HVGT could be carried out effectively, without affecting the economy.
Other ways to boost Malaysia’s income
MOF added that the government has taken several measures under direct and indirect taxes to strengthen the country’s revenue collection. Among them is the implementation of the Capital Gains Tax (CGT), which began in March 2024.
“Based on the current volume and value of transactions for unlisted shares, the Government estimates revenue collections to be around RM800 million per year,” they shared.
The review of sales tax rates and the expansion of the scope of service tax, which came into effect in July 2025, are also expected to provide an additional revenue of RM5 billion for 2025 and double to RM10 billion for 2026.
Meanwhile, the implementation of the low-value goods tax (LVG), effective from January 2024, recorded tax collection of around RM500 million in 2024.
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