Review luxury tax or risk losing revenue, Ismail Sabri urges govt

 

PARLIAMENT | The government has been urged to review its proposal to introduce a luxury goods tax, as tabled by Anwar Ibrahim in the revised Budget 2023.

Former prime minister Ismail Sabri Yaakob (BN-Bera) said the luxury tax will affect the revenue generated from the tourism sector.

Illustrating Malaysia as a shopping haven for foreign tourists, he said the introduction of this tax would drive away tourists to neighbouring countries.

“For example, the retail sector in the United Kingdom was hit hard when the government introduced a tax on luxury goods.

“According to a Wall Street Journal report, foreign tourists, especially from the US, chose Paris and Milan as shopping destinations over London.

“The number of foreign tourists shopping in European capitals other than London increased by 80 percent.

“This is due to the UK government's decision, in 2020, not to allow tourists to reclaim VAT (value-added tax) for shopping,” he said in Dewan Rakyat today when debating the 2023 Supply Bill.

Earlier, Ismail Sabri said 30 percent of the RM86.1 billion in national tourism income in 2019 came from the shopping activities of foreign tourists.

Therefore, he called on the government to introduce a mechanism to avoid international tourism from being exempted from the tax.

Allow targeted EPF withdrawals

In other development, the Umno lawmaker also reiterated calls for the government to allow targeted withdrawals from the Employees Provident Fund (EPF).

While commending the RM500 aid allocation to EPF members aged between 40 and 54 who have less than RM10,000 in their Account 1, describing it as a “noble” effort, Ismail Sabri said those in dire need of money would only be able to enjoy the aid years later.

He stressed that the people, especially those badly affected by the floods, need immediate assistance.

“Their houses are being auctioned off now. Their children are going to university now. Those who are about to be declared bankrupt happening now.

“If we wait for another 15 years, their houses would be auctioned off already.

"Don't close the door (on disallowing EPF withdrawals) immediately, allow the conversation to happen again.

“Give a chance to those who need it to continue with their lives. Otherwise, many will be affected,” he added. - Mkini