LANGKAWI: The introduction of a 10% sales tax on low-value goods (LVG) costing RM500 and below sold online will improve local businesses and the economy, say traders here.
Retail shop owner Lee Han Eng said the new tax ruling will benefit local traders.
“It is good news for us, especially for local traders and retailers, as this will encourage consumers to buy stuff from traders like us,” he said, adding that this would level the playing field.
Another trader Razak Elyas shared similar views, describing the government’s move as timely.
“This will not only help us, but also spur the country’s economy with people buying more from local businesses,” he said.
Langkawi Chinese Chamber of Commerce chairman Joseph Ooi said the move by the government is a small step towards protecting local traders.
“I believe it is not meant to stop online traders from doing business, but providing an alternative for consumers,” he said.
Ooi, however, said the government should review the implementation from time to time.
On Dec 18, the Finance Ministry announced that a 10% tax would be imposed on imported LVG sold online to level the playing field for businesses in Malaysia, especially micro, small and medium-sized enterprises.
The government will start charging the sales tax from Jan 1, 2024, as announced by the Customs Department.
Malaysia was supposed to impose the tax on April 1 this year under Budget 2022, but it was postponed indefinitely by Customs in March.
Meanwhile, online consumer Azmir Razak, 44, said the introduction of the sales tax will affect his spending habits online.
“For me, I prefer buying online instead of physical stores. Buying online is much cheaper. I hope the government will review the decision,” he added.
Another online shopper, Tina Heng, 31, said she will continue ordering her face masks from South Korea via online platforms.
Heng said this would still be cheaper despite the sales tax.
“Certain things can only be found online, but not in local stores,” she added.
