KUALA LUMPUR (March 7): Putrajaya should review its decision of implementing a luxury goods tax as international tourists may stop shopping in Malaysia, resulting in lower tourism receipts, said former prime minister Datuk Seri Ismail Sabri Yaakob.
Ismail Sabri (Umno-Bera) told the Dewan Rakyat on Tuesday that shopping activities contributed to 30% of the country’s international tourism receipts of RM86.1 billion in 2019, as Malaysia is deemed a shopping haven for tourists.
“Imposing this tax would cause them to spend in neighbouring countries. Our neighbouring countries are already racing to attract tourist arrival, and to build their countries as a shopping hub,” he said in his debate on the revised Budget 2023.
“The government needs to be careful in the implementation of this tax. For example, the retail sector in the UK was hit hard when the government introduced a tax on luxury goods,” he added.
Ismail Sabri said Malaysia’s weak ringgit is an advantage over neighbouring countries in attracting tourists to shop in the country, and maintaining a low tax rate could help sustain the nation's position as a shopping paradise.
Repeat call for EPF withdrawals
Ismail Sabri also repeated calls for the government to allow withdrawal of Employees Provident Fund on a targeted basis for those in need.
Although the government’s move to credit RM500 into the EPF accounts of the B40 community is commendable, contributors will only be allowed to withdraw upon retirement, said the Umno vice president.
“If the contributor is 40 years old, withdrawal will only happen 15 years later. What the government wants to do is good, but the difficulties that the people need to address are now, not 15 years later,” he said.
“The difficulties they face are now; their houses are up for auction, their children are entering university, or about to be declared bankrupt, it is all happening now. Not that we don’t understand, we understand [about the retirement crisis], but implement it in a targeted manner with conditions set by the government.
“I hope the government will consider it one more time. I hope there will be good news for EPF contributors during the finance minister's winding up speech,” he added.
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