As the managing partner of Syarikat Ong, a business service firm specialising in corporate secretarial and taxation services, and a council member of the Chartered Tax Institute of Malaysia, I’ve been closely monitoring the ever-evolving tax landscape in our country.

malaysia low value goods tax

Today, I want to discuss a topic that might have flown under the radar for many of us: the implementation of a sales tax on low-value goods (LVG), set to begin on January 1, 2024

In the recent budget announcement, much attention was given to the tax on high-value goods, but what about the low-value goods tax? It had been on the horizon but somehow faded into the background for over a year. Suddenly, out of nowhere, the customs department announced its impending arrival.

Applicable to low-value goods sold at a price not exceeding RM500, any seller with a total sale value of LVG brought into Malaysia in 12 months exceeding RM500,000 will need to charge this LVG tax upon selling their goods. This change directly impacts small and medium-sized businesses, and it’s crucial for SMEs to understand and adapt to these new regulations.

In fact, this tax will affect both individuals and corporate entities alike. It’s crucial that we factor these changes into our cost calculations and budgets. For businesses, especially those reliant on imports, the impact will be evident. For individuals, your online shopping habits, including those 11.11 deals, will also be affected. The clock is ticking; this is your last chance to make your low-value goods purchases LVG tax-free!

malaysia low value goods tax

The adage goes, “There are two things in life that you can’t escape: death and taxes.” In this case, it certainly holds true. When you consider this alongside the increase in service tax rate from 6% to 8%, the introduction of high-value goods tax, and the capital gains tax on share sales for unlisted companies, it’s evident that the government is expanding the tax base. Coupled with the impending introduction of e-invoicing, the government is clearly making efforts to bolster its coffers.

However, we must acknowledge that this was a tough decision for the government. Our national coffers are in dire need of replenishment, and addressing issues such as subsidies, effective government agendas, and the prevention of financial inefficiencies demands political will and time.

Regardless of who held the reins in the past, the accumulation of issues over the years has made it challenging to achieve a quick turnaround. The real concern now is whether the people and small to medium-sized businesses can absorb these changes in the short term, as the tax base is broadened.

For insights into Malaysian tax changes and their impact on your business, we’re are here to help you navigate these changes with prudence and resilience.