Malaysia’s Ministry of Finance tabled the Sales Tax (Amendment) Bill 2022 in Parliament on 1 August, which will impose a sales tax on low-priced goods flown into the country from overseas.
Low-priced goods are defined as any goods that are put on the shelves overseas and sold for less than a specified amount. A merchant is a seller who sells low-priced goods online or operates a website that sells low-priced goods.
The bill does not yet spell out the rate of sales tax on low-priced goods, but the Customs Department’s website suggests that the sales tax will range from 5 to 10%.
The Finance Minister said in his 2022 Budget speech last year that the government would impose a tax on goods that cost less than RM500 when flown in from overseas to Malaysia from January 2023. This means that from 2023 onwards, people who choose to shop on Taobao by air will be taxed.
Currently, nationals are not required to pay sales tax on overseas purchases as long as they choose to have the goods flown in and purchase items that do not exceed RM500. However, this facility will end in 2023, when people will start paying the tax.
This measure is being implemented to give local manufacturers and vendors a fair deal, as goods made locally are currently subject to sales tax, while goods flown in from overseas will avoid the tax.
