2023 Budget: No GST but luxury goods to be taxed

24 February 2023

By Wartawan Nabalu News

KUALA LUMPUR: The government has no plans to implement broad-based consumption taxes such as the Goods and Services Tax (GST), according to Malaysia's Prime Minister, Datuk Seri Anwar Ibrahim.

Instead, the government is taking a more progressive approach to expanding the tax base to those who have the ability to pay.

"Given that most people are still struggling, food inflation is over 5 per cent, and wages are still low, it is not the appropriate time to introduce and implement such a tax," he said.

Instead, the government plans to introduce a Luxury Goods Tax starting this year with a specific threshold based on the type of luxury item, such as luxury watches and fashion items.

“All luxury items must be taxed," said Anwar who is also the Finance Minister when presenting the 2023 Budget in the Dewan Rakyat, today.

In line with international best practices, the government will also study the introduction of a Capital Gains Tax on the disposal of unlisted shares by companies starting in 2024 at a low rate.

"The government will hold consultations with relevant parties to examine the details of this proposal," he added.