Luxury goods tax to roll out on May 1 next year

Prime Minister Anwar Ibrahim says the finance ministry is in the final stages of completing the tax policy and legislation.

(FMT) – The new luxury goods tax will take effect on May 1 next year, says Prime Minister Anwar Ibrahim.

Anwar, who is also the finance minister, said the specifics regarding the implementation mechanism, types of goods applicable, and the tax rates on high-value items will be disclosed once the details are finalised and approved by the Cabinet.

“At this time, the finance ministry is in the final stages of completing the tax policy and legislation,” he said in a written parliamentary reply.

“The process of policy determination and legislation drafting has taken into account input received from various stakeholders through engagement sessions conducted by the finance ministry and the customs department.”

Anwar was responding to Chong Zhemin (PH-Kampar), who asked if the luxury goods tax will be implemented soon and the proposed approach for its implementation.

When tabling the 2024 budget in October, Anwar announced that a new luxury tax of 5% to 10% would be introduced and applied to items such as jewellery and watches, with provisions for tourists to seek tax refunds.

Several MPs have since called for more details on the proposed tax and whether a list of goods and products to be taxed was available.

Business and tourism groups have also warned that the luxury tax could potentially discourage foreign tourists from visiting Malaysia for shopping purposes.