High Value Goods Tax

• Government will not proceed with implementation of High Value Goods Tax (HVGT), says ministry of finance

  In Local News / By Gerard Lye / 30 July 2025 9:37 am / 10 comments

  

  Following a Dewan Rakyat sitting on July 29, 2025, it has been revealed that the government has officially scrapped its plan to impose the High Value Goods Tax (HVGT), over a year after it was first announced in Budget 2024.

  The government originally set May 1, 2024 to implement the HVGT but this was put on hold after pushback from industry players. The proposed tax rate would have been between 5% and 10% tax and affect cars above RM200,000, watches over RM20,000 and jewellery beyond RM10,000 – it was projected to bring in RM700 million to the government.

  In a written parliamentary reply on Tuesday, the ministry of finance (MoF) confirmed that the government has decided not to proceed with the HVGT, previously known as the luxury goods tax. “However, the elements of the HVGT have been incorporated into the revamped sales tax regime, where luxury and discretionary items are now taxed at rates of 5% or 10%,” the MOF stated.

  

  The reply was in response to a query from Datuk Shamshulkahar Mohd Deli, who had asked about the projected increase in national revenue from the government’s fiscal reforms. These reforms included the proposed HVGT, a digital goods tax (DGT), a capital gains tax (CGT), a low-value goods tax (LVGT) as well as the expansion of the sales and service tax (SST).

  While the HVGT is no more, the finance ministry anticipates government revenue to increase through other new and expanded tax measures. This includes the broadened scope of the SST that came into effect on July 1, 2025, which is expected to bring in an additional RM5 billion this year, with this figure doubling to RM10 billion by 2026.

  Meanwhile, the CGT that came into effect on March 1, 2024 is projected to generate approximately RM800 million annually, while the LVGT that start earlier on January 1, 2024 generated approximately RM500 million in revenue in 2024.

   

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

  In Local News / By Jonathan James Tan / 27 February 2025 11:13 am / 6 comments

  

  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.

  

  “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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• High Value Goods Tax being fine-tuned – HGVT or Luxury Tax for cars above RM200k soon in Malaysia

  In Local News / By Jonathan Lee / 11 July 2024 9:52 am / 32 comments

  

  Remember the High Value Goods Tax (HVGT)? It was announced during the tabling of Budget 2024 last year and set to be implemented on May 1 this year, but was put on hold as the ministry of finance postponed bringing the bill to parliament. According to The Star, the said ministry is currently fine-tuning the policies and legal frameworks.

  In a written reply to Ayer Hitam MP Wee Ka Siong’s enquiry regarding HVGT’s status, the ministry said the reworking of the bill is meant to ensure the tax is being implemented in an orderly and transparent fashion.

  The ministry added that the implementation of the tax will also align with “international practices and tax principles” without impacting economic activities and the rakyat‘s “wellness”. The new date of HVGT’s implementation will be decided by the cabinet.

  It was previously reported that the bill was delayed due to disagreements over the definition of “high-value goods” and the price range of items that would be subject to the tax. Back then, the ministry said it was the final stage of refining certain matters related to the tax structure, especially the type of goods categorised as “high-value” as well as the threshold determination and tax rates.

  The government had initially planned to exact HVGT on jewellery over RM10,000, watches above RM20,000 and cars priced beyond RM200,000, at a rate of between five and ten per cent.

   

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• High-Value Goods Tax implementation put on hold, finance ministry says gov’t to announce new date later

  In Local News / By Anthony Lim / 29 March 2024 6:07 pm / 42 comments

  

  The High-Value Goods Tax (HVGT), which was supposed to be implemented from May 1, 2024, has been put on hold. It was reported that this is due to the finance ministry’s postponement in presenting the bill to parliament.

  According to The Edge, the delay in the bill was due to disagreements over the definition of “high-value goods” and the price range of items that would be subject to the tax, this despite dialogues and consultations having been made with retail industry players and tax professionals.

  The deferment of the new tax, which is to be imposed on luxury or big-ticket items at a rate of between 5% and 10% as announced during the tabling of Budget 2024, was confirmed by deputy finance minister Lim Hui Ying, who told The Star that the government will continue engaging with the industry to ensure the tax principles and legislation can be formulated and drafted carefully.

  The ministry, she said, is in the final stage of refining certain matters related to the tax structure, especially the type of goods categorised as “high-value” as well as the threshold determination and tax rates.

  

  “HVGT will only be imposed on certain goods categorised as high value. Fundamentally, low-income groups will not be affected by its implementation because they are unlikely to purchase high-value goods,” she said in a written reply to the news publication.

  “The government will announce the new implementation date of the HVGT later,” she said. She added that the HVGT will not be imposed in designated areas including Labuan, Langkawi, Pangkor and Tioman, as well as special areas such as free zones and licensed warehouses. Langkawi is of course a haven for supercars, not always in a good way.

  Initially, it was stated that jewellery over RM10,000, watches above RM20,000 and cars priced beyond RM200,000 would be subject to the HVGT. However, it was not detailed how this would be applied, and how the thresholds would be defined.

   

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• High Value Goods Tax to start in May 2024: cars above RM200k to get another 5% to 10% tax in Malaysia?

  In Cars, Local News / By Hafriz Shah / 3 November 2023 8:30 am / 62 comments

  

  First announced as luxury tax, Malaysians will soon face the newly-named High Value Goods Tax (HVGT) starting from May 1, 2024 according to prime minister Datuk Seri Anwar Ibrahim. The new tax, set to be imposed on luxury or big-ticket items, will have a rate of between 5% and 10% as announced at the tabling of Budget 2024.

  However, beyond high-value jewellery and watches as mentioned by Anwar before, it appears the HVGT will also apply to private jets, yachts and luxury cars, as reported by The Star. The items and the thresholds were listed in a guideline provided by the finance ministry for the industries to give their feedback.

  For now, it looks like jewellery over RM10,000, watches above RM20,000 and cars priced beyond RM200,000 will be subject to the new high-value tax of between 5% to 10%. It is not yet known if the so-called luxury cars will get an additional tax of 5%, 10% or anything in between.

  Taking the base RM200k price, an extra 5% tax (assuming it’s imposed on the full amount) will mean the car will be RM10k more expensive to the buyer. If the HVGT is set to 10%, that’s RM20k. Likewise, a RM500k car will be costlier by RM25k at a 5% rate, or a full RM50k more at 10%. Though it’s all a straightforward percentage game, it sure sounds like it will affect the RM200k car buyer more, right?

  

  

  The base MINI Electric would escape the HVGT, but the Kia Carnival will be taxed more?

  It will also have more pronounced effects on car models that have variants straddling the tax threshold. Taking the Tesla Model 3 for instance, while the base RM189k SR would not be affected by the HVGT, the RM218k LR would have to be repriced to either RM229k (5%) or RM240k (10%) from May next year. And, working on the basis that tax will be applied to an item’s final price, if you tick a few option boxes even on the base model, that will tip it over the crucial threshold.

  As it is, a few popular models already have long waiting lists that could stretch past the May 1 deadline, so this price hike may already apply to customers making a new booking now. Even for models without such long waiting times, will this impending tax cause another wave of rushed bookings like the SST tax holidays in the past few years?

  It’s unlikely that the government will extend or absorb the tax difference past the implementation date like it did with the previous SST holidays, seeing that the HVGT is meant to “tax those who had the means.”

  Also, would this even apply to EVs, which are virtually sold tax-free here in Malaysia (apart from a 10% sales tax for CBU models)? What about grey import cars that have far more fluid pricing? Will discounting be more prevalent to bring prices below the threshold? Should we expect more cars to be priced at RM199,999 soon? Used cars macam mana? There are certainly plenty of questions that are yet to be answered.

  

  

  Should these entry-level premium cars get taxed at the same rate as far more expensive models?

  “At this juncture, the finance ministry is finalising the policy and legal aspects of taxing high value goods. Any changes to tax policy will have to take into account the impacts on the economy and cost of living of the people,” said the PM in a written parliamentary reply dated Nov 1.

  What do you think of this, folks? Is it fair for the government to tax cars specifically above RM200k, and is that even the right threshold to begin with? Discuss below.

  In any case, if you’re looking to buy a premium car anytime soon, PACE 2023 this weekend at the Setia City Convention Centre is the place to be for the best year-end offers and perhaps, your last chance to avoid paying the new High Value Goods Tax.

   

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