High Value Goods Industry Can Relax For Now As Luxury Tax Delayed

The High Value Goods Tax (HVGT) that was expected to be implemented this year has been delayed for now, giving industry players and stakeholders cause to celebrate for now.

Originally intended to come into effect on 1 May 2024, the HVGT has been indefinitely shelved for now as the Finance Ministry had not presented the Bill in Parliament yet.

New implementation date to be announced later

According to reporting by The Star, industry players said the HVGT would not become a significant contributor to the country’s tax base and have subsequently called for a better tax system in the form of the Goods and Services Tax (GST).

“The government needs to continue engaging with the industry to ensure the tax principles and legislation can be formulated and drafted carefully. The government will announce the new implementation date of the HVGT later,” said Deputy Finance Minister Lim Hui Ying.

She also mentioned that the ministry is currently in the final stages of refining certain matters related to the tax structure. This includes determining which type of goods are categorised as “high value”.

“HVGT will only be imposed on certain goods categorised as high value. The determination of a high value is based on the set threshold. Fundamentally, low-income groups will not be affected by its implementation because they are unlikely to purchase high-value goods,” she added.

A Tourist Refund Scheme will also be implemented in an effort to ensure that the HVGT would not affect economic activities, especially in the tourism sector.

Finance Ministry yet to table bill

The HVGT was expected to be passed during the parliament meeting on 27 March 2024. However, the ministry did not introduce the Bill. The next parliament meeting will be conducted from late June to mid-July.

During its announcement at Budget 2024, the HVGT was planned to be imposed on jewellery, high-end watches, designer clothes and accessories, cars, yachts, jets and properties that surpass a certain price.