KUALA LUMPUR (BERNAMA) – Major Malaysian retailers associations have collectively urge the government to rethink and withdraw the proposal to impose a luxury tax.
The imposition of a luxury tax may make pricing in Malaysia non-competitive and may deter tourist arrivals, according to a joint media statement released yesterday.
Furthermore, Malaysians will be enticed to buy overseas and Malaysians shopping abroad will take money out of the country, they said.
“This is a lose-lose proposition – losing foreign tourist arrivals and losing Malaysians from buying locally, coupled with the loss of foreign exchange.
“Even if a mechanism can be designed for foreign tourists to claim back such luxury taxes, Malaysians would still be enticed to do their shopping overseas.”
The statement was issued by the Malaysia Shopping Malls Association, BBKLCC Tourism Association Kuala Lumpur, Batu Road Retailers Association, Bumiputra Retailers Organisation, Federation of Malaysia Business Associations, Industries Unite, Malaysia Retailers Association, and the Malaysia Retail Chain Association.
They said only big-ticket ostentatious products should be adequate to meet the criterion (of luxury tax) if the economic philosophy is to tax the rich.
“Big-ticket items like sports cars, racing motorbikes, yachts and aeroplanes may be considered,” they said, adding a holistic view should be taken that will balance between risk and reward and the flow-through multiplier effect of business activities that contributes to the economic growth of the nation.
In Budget 2023, Malaysian Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim had proposed to introduce the luxury goods tax from this year, with a certain value limited to the type of goods, including watches and fashion items, to increase national revenue.