During the earlier presentation of Budget 2022 on 29 October 2021, the Government had announced a proposal to impose excise duty on pre-mixed preparation products with a high sugar content exceeding the threshold value of 33.3 grams/100 grams besides service tax on goods delivery services and a sales tax on low value goods (Low Value Goods – LVG).
The imposition of the excise duty on pre-mix preparation products is to continue under the Government’s efforts in supporting the strategy of curbing the increasing trend of diabetes, obesity and other non-communicable diseases linked to unbalanced nutrition, the Ministry Of Finance said in a statement today (March 22).
The expansion of the scope of service tax to cover goods delivery services provided by non-courier companies aims to provide equal treatment among all goods delivery service providers. Currently only services provided by courier companies are subject to service tax.
The expansion of the scope of sales tax to cover LVG, which is goods worth RM500 and below that are sold online by foreign traders and imported into Malaysia is to provide equal treatment between locally produced goods and imported goods. This move is also aimed at boosting domestic demand.
The third initiative is recommended to start in 2023. However, it is important to note that the retailers as well as the producers need a sufficient period of time to promote their preparations among the SME sector. There is an opportunity to reset the effective date of the imposition of these three duties and taxes, MOF said.
Accordingly, the Government has agreed to postpone the effective date of the excise duty on pre-mixed products containing sugar exceeding the limit of 33.3 grams/100 grams, service delivery of goods and on LVG to a date that will to be determined later.
“It also gives space to the industry to coordinate based on their management model, implementation and document preparation while giving the government to debate the required changes to the relevant Acts of law,” MOF added.
