The Ministry of Finance (MOF) has officially confirmed that the government will no longer implement the High Value Goods Tax (HVGT), after more than two years of planning. Initially slated to come into effect in May 2024, the government announced back then that it has deferred the implementation to further refine the bill.
Now, in a written parliamentary reply to Jempol MP Datuk Shamshulkahar Mohd Deli yesterday, Minister of Finance II, Datuk Seri Amir Hamzah Azizan, said, “The Government has decided not to proceed with the implementation of the High Value Goods Tax. However, the principle behind the HVGT has been incorporated into the revised sales tax framework, whereby luxury and discretionary goods are subject to tax rates of 5% or 10%.”
HVGT was initially floated during the revised Budget 2023 announcement. The proposed tax rate was between 5% to 10% and would affect cars priced above RM200,000, watches over RM20,000, and jewellery beyond RM10,000. All in all, HVGT was estimated to generate up to RM700 million of yearly revenue for the government.
While the HVGT is no more, the MOF says that the revised SST rates, which came into effect on July 1st, are expected to generate an additional RM5 billion in revenue for 2025, doubling to RM10 billion in 2026.
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Meanwhile, the Capital Gains Tax (CGT), which was implemented on March 1st, 2024, is estimated to have collected around RM800 million of revenue per year. While the low-value goods tax (LVGT), implemented on January 1st 2024, recorded approximately RM500 million of tax collection for the year 2024.
He also noted that the Service Tax on Digital Services (SToDS), which has been in effect since January 2020, generated RM1.6 billion in tax revenue in 2024.
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