Shopee parent company, Sea Limited said it welcomes Malaysia’s move to impose the low-value goods (LVG) tax adding that it will benefit local micro, small and medium enterprises.
The ecommerce giant added strongly supports this strategic initiative and believes it will provide a significant boon to the MSME sector while contributing positively to the broader Malaysian economy.
SEA believes the LVG tax will enable local businesses to market products of the same quality competitively at an even selling price, stimulating demand for local goods. Imported low-value goods were previously not subjected to any tax whilst a six per cent sales and service tax (“SST”) was imposed on locally produced items, resulting in local products being sidelined by consumers.
Terence Siau, Country Head of Sea Limited (Malaysia), believes that the LVG tax enables sellers, especially the MSMEs, to showcase that Malaysian-made and manufactured products can be on par with international standards.
It is also important to note that the implementation of the LVG tax is not exclusive to Malaysia, as other nations have already adopted similar measures within their Goods and Services Tax (“GST”) frameworks, including Australia, New Zealand, and Singapore. In Singapore, a 9% GST is currently applied to items valued at S$400 and below, imported via air or post. Meanwhile, in Australia, 10% GST is currently applied to retail sales of imported low-value goods (AU$1,000 or less) when purchased by consumers.
The imposition of the LVG tax in Malaysia, which took effect on the 1st of January, is based on a guideline released by the Government in November 2023.
