LVG, Digital Services Taxes Have Collected More Than RM2 Bil In Revenue

Putrajaya has collected around RM476.1 million from the Low-Value Goods (LVG) tax in 2024, since its implementation on 1 January 2024. 

The LVG tax usually applies to imported goods that are valued at RM500 or less, purchased online and delivered via air courier. According to the Finance Ministry, around 63 sellers from 15 countries have registered under the tax framework.

In addition, the Service Tax on Digital Services, which first came into effect in 2020, generated around RM1.6 billion in revenue in 2024. This particular tax applies to digital services provided by foreign registered businesses to Malaysian consumers. Currently, 464 foreign entities from 29 countries are registered under the scheme.

The Finance Ministry provided the update in a written Parliamentary reply earlier this week.

No plans to reintroduce GST

For the Capital Gains Tax (CGT) which was introduced in March 2024, the ministry said that revenue figures would only be available from 1 July 2025 onwards.

The CGT applies to the disposal of unlisted company shares and allows taxpayers to choose between a 10 percent tax on net gains or a 2 percent tax on gross sales for shares acquired before 1 March 2024.

These responses were given by the ministry to Datuk Seri Ismail Sabri Yaakob (Barisan Nasional-Bera), who had asked for the amount of revenue received, and whether Putrajaya will reintroduce the Goods and Services Tax (GST).

The ministry has clarified that the government has no immediate plans for the GST. The main reason given for this is the long implementation period that is required.

Instead, the government will be focusing on tuning the existing Sales and Service Tax (SST), which has been in use for over 40 years.