KUALA LUMPUR (June 19): Malaysia's gold industry, which has only since recovered from the effects of the Covid-19 pandemic in 2023, is set to lose its shine again in the form of the impending luxury goods tax (LGT), according to the Malaysia Gold Association (MGA).
In a statement on Monday (June 19), MGA president Datuk Louis Ng underlined that the implementation of the goods and services tax in 2015, and sales and services tax in 2018 both resulted in gold jewellery demand dropping.
“The exports of gold jewellery were affected severely during the Covid-19 pandemic and had only recovered in the recent year before Malaysia is bound for another fall when the impending LGT is imposed on gold products,” Ng said.
“This has raised concerns among gold players in Malaysia, that MGA sees the need for it to be urgently addressed prior to the official enforcement,” he added.
Ng said the MGA had raised its concerns regarding the LGT to the government during a meeting back in March hosted by the Royal Malaysia Customs Department.
In particular, Ng noted the government engagement analysed the impact of LGT on gold import and export activities, manufacturing, wholesale, and retail such as domestic and tourism sales.
Meanwhile, touching on gold demand, Ng said it was also significantly impacted by the Covid-19 pandemic, contrary to what many think.
“The demand for investment gold spiked during the Movement Control Order (MCO) period due to rise in gold prices, implementation of government’s fiscal support programme, the moratorium on bank loans and social restrictions — all these contributed to more cash in hand for investors to stock up on physical gold.
“However, gold demand dropped post-MCO due to economic recovery, decrease in investment sentiment, inflationary pressures and change in consumer preferences — towards travel,” he added.
According to the MGA, Ng said this in his presentation at the Asia Pacific Precious Metals Conference (APPMC) 2023.
Ng called on Putrajaya to have government agencies participate in gold conferences such as APPMC, to both formulate effective government policies affecting the gold industries as well as ensure Malaysia remains competitive in the global gold arena.