Price going up: The new tax on luxury goods is expected to take effect on May 1.
GEORGE TOWN: Luxury goods outlet operators are expecting business to pick up by year-end before the High Value Goods Tax (HVGT) takes effect on May 1.
They expect luxury goods buyers to start looking for their favourite merchandise before the Chinese New Year celebrations.
Shop owner Adriana Lim said she expected the prices of branded bags, new or preloved, to shoot up when the tax takes effect.
“With the luxury goods tax starting in May, the public will want to take the opportunity to buy branded items before prices go up further,” she said at her shop in Penang Plaza.
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Lim, who has been in the business for more than 15 years, said even though the prices of branded bags were increasing every year, there were still people buying them, especially luxury brand lovers and collectors.
“Prices of bags such as Louis Vuitton, Chanel, Hermes, Prada and other brands have increased two to three times a year but there are those who are willing to spend.
“I think the new tax will affect the middle class and working professionals who usually go for second-hand luxury goods in the range of RM4,000 to RM RM5,000,” she said.
Watch specialist Vincent Wong said the new luxury goods tax might affect local sales because Malaysia did not have it in the past.
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“In the short term, some people may think twice about buying branded goods because of the tax, but in the long term, they will get used to it, especially collectors,” he said.
Wong, who has been in the trade for more than 20 years, said he expected business to pick up during the Christmas and Chinese New Year period in anticipation of the tax implementation.
“I think foreigners will not be buying luxury watches here once the new tax is in place,” he said.
A businesswoman, who wanted to be known as Anne, said she would not be buying more bags in the future.
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“I think branded bags will cost a lot more, and I might have to stop buying them next year,” she said, adding that she might consider pre-loved ones if they were tax-free.
Meanwhile, a check at jewellery shops found that sales were sluggish probably due to the high price of gold.
At press time, the price of gold was RM298 per gram while the trade-in price was RM267 per gram.
