KUCHING: Malaysian consumers who have been enjoying the convenience of online shopping for low-value goods (LVGs) may need to adjust their spending habits starting April 1, 2023.
The government will be introducing a 10 per cent sales tax on LVGs purchased through online platforms, regardless of whether the seller is based overseas or locally. The move aims to establish equality between LVGs that are bought from overseas and those that are bought locally.
PricewaterhouseCoopers (PwC) Taxation Services Malaysia director Annie Thomas told New Sarawak Tribune that the sales tax applied to LVGs priced at RM500 or less and sold through online platforms like Lazada, Shopee, Amazon, and Taobao.
Thomas said the introduction of sales tax on LVGs in Malaysia was a progressive step towards ensuring fair treatment between LVGs purchased from overseas or local sellers.
She also addressed some of the frequently asked questions about the sales tax, including exemptions for goods valued at RM500 or less imported through seven international airports using air courier service.
Additionally, sales tax may also need to be paid on goods imported via air by courier service if the value, inclusive of insurance and transportation costs, exceeds RM500.
Due to the COVID-19 pandemic, Malaysia has witnessed a surge in online shopping, resulting in a 47 per cent year-on-year increase of online shoppers to 14.43 million at the start of 2022, according to DataReportal.
This trend is expected to persist, with a PwC Global Consumer Insights pulse survey showing that 37 per cent of Malaysian consumers prefer to shop online for clothing and footwear, and 26 per cent opt for online shopping for consumer electronics. The Malaysian Communications and Multimedia Commission (MCMC) estimates that over 31 million parcels were delivered to Malaysia in 2021.
While the new sales tax may result in a slight increase in the price of LVGs purchased online, Thomas assured consumers that the sales tax costs had already been embedded in the price of goods retailed locally.
The rollout of the sales tax was first revealed during the release of Budget 2023 in October of last year, with the original launch date set for January 1. However, the revised budget that will be presented today (Friday) will be closely watched to see whether the implementation of the sales tax will proceed as planned or be delayed until April.
The implementation of the sales tax is a significant step towards ensuring fair competition and will bring much-needed revenue to the government’s coffers.
