PETALING JAYA: A business group has voiced hope that the government will abandon plans for a luxury tax until the economy recovers.
Small and Medium Enterprises Association chairman William Ng said the organisation which represents some 3,000 members has yet to receive any information about the proposed tax announced in this year’s budget.
The government has said details would be provided this month, but Ng said he hoped the government will not go through with it.
He said a tourist tax experiment in the UK had shown that tourists, even high-end ones, are sensitive to pricing and would “vote with their wallet” by going to destinations where shopping is more affordable.
The British “tourist tax”, in the form of discontinued tax refunds for tourists, has received brickbats from retailers there including from high-end brands.
Ng said millions of ringgit have been spent by industry players to promote Malaysia as a shopping haven for tourists, and imposing the luxury tax would affect Malaysia’s competitiveness as a tourist destination.
A spokesman for the Malaysian International Chamber of Commerce and Industry said the delay, in providing information about the tax, indicates the government is not “shooting from the hip” as with many previous policies.
“I also hope the delay is because they are engaging with industry (players)”, the spokesman told FMT.
The spokesman also said a luxury tax is problematic as it would be difficult to define what is considered a luxury product or service.
Source: https://www.freemalaysiatoday.com/category/nation/2023/06/27/sme-group-keeps-up-hope-of-luxury-tax-being-scrapped/