New Bill Aims To Impose 10% Sales Tax On Imported Low-Value Goods Bought Online

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A new bill that aims to impose sales tax on imported low-value goods (LVG) bought online is expected to be

passed in parliament soon, The Star reports. It will be tabled for first reading by Deputy Finance Minister Yamani Hafez Musa during the current Dewan Rakyat meeting, which is slated to end on 4 August 2022.

This comes after proposed amendments to the Sales Tax Act 2018 to tax LVG sales through the Sales Tax Bill 2022. Under the bill, a new Section 11A will be created – defining such products as “any prescribed goods or class of goods outside Malaysia which are sold and bought in [the country].” The aim of the tax is to equal tax treatment for locally manufactured and imported LVG products, with an expected flat rate of 10% to be charged to both local and foreign sellers. For context, local manufacturers are currently taxed 5% to 10% sales tax for these items. Goods that are categorised under this category include books, clothing, cosmetics, electronics and so on that do not exceed RM 500 per consignment.

Meanwhile, the determination of low-value goods will be conducted by the ministry based on three main criterias under Section 8 of the law. These include the class of the goods, their pricing, and the manner in which they are brought into the country. The sale value of LVG on which tax becomes payable will be based on its price that excludes any other taxes, fees or other charges imposed.will determine the new law’s date of implementation, which is speculated to commence in January of next year.

 

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