Malaysia’s Prime Minister and Minister of Finance, Anwar Ibrahim, has announced plans to impose a new luxury goods tax starting from May 1, 2024. This tax is proposed to be in the range of 5% to 10% and will apply to items such as jewellery and watches.
The proposed tax rates on luxury items will range between 5% and 10%. The specific rates for different categories of goods are expected to be determined as part of the final policy and legislation. The tax is set to go into effect on May 1, 2024.
The Ministry of Finance is in the final stages of developing the tax policy and related legislation. This process has taken into account input from various stakeholders obtained through engagement sessions conducted by the ministry and the customs department.
The full details of the implementation mechanism, the types of goods subject to the tax, and the specific tax rates will be disclosed once they are finalised and receive approval from the Cabinet.
It’s worth noting that former Prime Minister Ismail Sabri Yaakob has expressed concerns that the introduction of a luxury tax could potentially discourage foreign tourists from visiting Malaysia for shopping purposes. The impact on tourism and retail sectors will likely be considered as part of the ongoing discussions surrounding this tax.