Online shopping sales tax successfully passes Dewan Rakyat

 

PARLIAMENT | The Sales Tax (Amendment) Bill 2022, which seeks to impose a 10 percent tax on imported low-value goods (LVG) sold by foreign sellers, has successfully passed the Dewan Rakyat.

While tabling the bill for its second reading today, Deputy Finance Minister I Mohd Shahar Abdullah said the government introduced these amendments to level the playing field between local and overseas sellers.

However, Lim Guan Eng (Pakatan Harapan-Bagan) questioned why the government is introducing a new tax as it will further burden the public who are already facing rising inflation.

He said it would make more sense for the government to exempt local online sellers from the existing sales tax if the government wanted to help them be more competitive.

“I agree we should level the playing field between local and overseas sellers, but I hope we do not do this by adding an extra burden to the consumers because, in the end, it is the consumers who have to pay more.

“What happened to the government who said, ‘We want to give subsidies’? This is not giving subsidies, this is adding a burden.

“Wouldn’t a more appropriate, sane, and reasonable step be to exempt the 10 percent sales tax for local sellers instead?” Lim said during Shahar’s winding-up speech for the bill in the Dewan Rakyat today.

He said the government should be taxing those who can afford it, rather than those who are already struggling economically.

New tax to rake in RM200 million

Lim also questioned how much the government expects to collect from this new tax on imported LVG.

In response, Shahar said the government expects to gain RM200 million in tax revenue annually.

“We are expected to collect RM200 million in one year. We want to make our local economy stronger and more sustainable.

“When we strengthen the local market, of course, our money is not flowing out (of the country) and when our money is not flowing out, the country’s fiscal position becomes stronger. That is one of our objectives,” he said.

Shahar added that the new tax is also meant to prevent people from exploiting the lack of a sales tax on imported LVG.

The bill was later approved in the Dewan Rakyat via a voice vote and it will now be sent to the Senate for deliberation.

If the Senate successfully passes it, the new tax is expected to come into effect on Jan 1, 2023.

The new tax was first announced by Finance Minister Tengku Zafrul Aziz during his tabling of Budget 2022 in Parliament last year. - Mkini