Kuala lumpur: The government has decided not to proceed with the implementation of the high-value goods tax (HVGT), according to the Finance Ministry (MOF). In a written reply on the Parliament website, the MOF stated that the principles of the HVGT have been incorporated into the revised sales tax structure, with luxury and discretionary items taxed at five or 10 per cent.

According to BERNAMA News Agency, the ministry made this announcement in response to a question from Datuk Shamshulkahar Mohd Deli (BN-Jempol). He inquired about the projected rise in national revenue resulting from fiscal reform measures, including the introduction of HVGT, the digital goods tax, capital gains tax (CGT), low-value goods tax, and the expansion of the SST tax and subsidy rationalisation that are being or will be implemented.

The proposal to introduce HVGT was first announced during the revised presentation of Budget 2023 in February 2023. Initially planned for implementation by May 2024, the government had expected to generate an additional RM700 million annually from it. However, more time was deemed necessary to engage with stakeholders to ensure its effective implementation without negatively impacting the economy.

Meanwhile, the MOF highlighted several measures under direct and indirect taxation to strengthen national revenue collection. This includes the implementation of the CGT, effective March 1, 2024, which is expected to yield approximately RM800 million annually based on current transaction volumes and values involving unlisted shares.

The revision of the sales tax rate and the expanded scope of the service tax, effective July 1, 2025, are anticipated to contribute an additional RM5 billion in revenue in 2025, with projections to double to RM10 billion in 2026. Furthermore, diesel subsidy targeting has generated RM600 million in monthly government savings. The low-value goods tax, effective January 1, 2024, has recorded a collection of about RM500 million for the year 2024.