THE luxury goods tax that is being finetuned will not affect the country’s tourism sector, said Deputy Finance Minister Steven Sim Chee Keong. 

He said tourists to Malaysia were not interested in shopping for luxury goods; instead, they came here to visit interesting destinations and national heritage sites, and buy local handicraft. 

“At the same time, they also get tax relief on the purchase of Malaysian handicraft. If we look at it from that perspective, we are actually encouraging more people to come,” he told reporters today. 

He was commenting on the call by former prime minister Ismail Sabri Yaakob for the government to reconsider the implementation of the luxury goods tax as this would deter tourists who wished to shop in Malaysia. 

According to Sim, the implementation of the tax was to increase tax revenue and create a more progressive taxation system without causing the industry to suffer. 

“We are engaging with all stakeholders including the retail and tourism sectors to see how the impact  can be reduced,” he said. 

Sim said the tax only applies to goods classified as luxury goods and does not involve essential goods such as food and mobile phones. 

In Budget 2023, Prime Minister Anwar Ibrahim proposed to introduce a luxury goods tax starting from this year – limited to a certain value for goods that include watches and fashion items – that he said would increase national revenue. – Bernama, March 15, 2023.