KUALA LUMPUR (March 30): Local gold traders, wholesalers and jewellers are concerned over the possible imposition of the Luxury Goods Tax on gold products, particularly gold jewellery, said the Malaysia Gold Association (MGA).
They voiced the concern at MGA's annual general meeting earlier this month, following which the association discussed the matter with the Ministry of Finance and Royal Malaysia Customs Department (RMCD) at a meeting on Monday (March 27), said MGA in a statement on Thursday.
Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim had on Feb 24 announced in the revised Budget 2023 that the government plans to introduce the Luxury Goods Tax from this year with a certain value limit according to the type of products. The move was said to be a progressive approach to broaden the tax base.
MGA said that based on its market observation, Malaysians in the B40 and M40 income groups, regardless of ethnicity, are prone to buying 999.9 gold bullion and 916 pure gold jewelleries as a form of investment and savings.
“So when gold is no longer affordable for general consumers, it will subsequently affect the sustainability of the gold industry altogether,” the association said.
Echoing the same sentiments were the Malaysian Indian Goldsmiths Jewellers Association and Federation of Goldsmiths and Jewellers Associations of Malaysia.
The three associations said while it is crucial to increase national income through a Luxury Goods Tax, the government should look into the survivorship of about 4,500 gold jewellers and 1,000 gold manufacturers, and employees in the industry if the tax is imposed on gold and jewellery products.
The associations have also suggested to the relevant government departments to look into taxes, such as the sales and services tax (SST) and income tax, collected from various gold traders and jewellers, such as Ar-Rahnu service providers, pawnbrokers, jewellers (goldsmiths), gold retailers, precious metal insurers, secured logistics providers, as well as bullion importers and traders, in the past three years — to analyse the figures and find out if it would be better with or without a Luxury Goods Tax.
“From the last enforcement of the goods and service tax (GST) to SST, MGA has always been proactively involved in facilitating the government with substantial information to smoothen their taxation plans rollout.
“MGA will continue to do our best to provide expert advice to help the government smoothly roll out the new policy, at the same time protect the survival of the gold industry,” MGA president Datuk Louis Ng said in the statement.
In the coming months, the three gold associations are set to work closely to exchange and compile further information and data required by the RMCD and the finance ministry to facilitate the final decision on the luxury goods tax for jewellery products at an agreeable threshold amount.
The government is expected to announce details of the Luxury Goods Tax in June. Deputy Finance Minister Datuk Seri Ahmad Maslan told Parliament on March 13 that his ministry was still fine tuning the tax details.