High Value Goods Tax (HVGT) still on hold – report

The implementation of the High Value Goods Tax (HVGT) is still on hold, the finance ministry told the Dewan Rakyat today, according to The Star.

The ministry added that the government is prioritising other fiscal reforms implemented last year – including the Low Value Goods Tax and targeted diesel subsidies – and that policies and legislation for any new taxes, HVGT included, must be drafted carefully.

“However, the government will continue studying the feasibility and approach of imposing a sales tax on high-value goods as among the elements in reviewing the rates and scope of the sales and service tax, as proposed under Budget 2025,” it said in a written parliamentary reply to Machang MP Wan Ahmad Fayshal Wan Ahmad Kamal, who asked about the status of the HVGT.

High Value Goods Tax (HVGT) still on hold – report

“This will allow a more holistic and efficient approach which upholds the principles of social justice and economics as well as the people’s welfare,” it added.

First announced in Budget 2024, the luxury tax was supposed to be implemented in May 2024, but was put on hold in March that year. The government was working on fine-tuning the policies and legal frameworks, but it was also reported that there were disagreements over what constituted ‘high-value goods’, the price threshold and the amount to be taxed.

The original plan was to slap a 5%-10% tax on cars above RM200,000, watches over RM20,000 and jewellery beyond RM10,000. What are your thoughts?

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