Govt Scraps Plan to Impose High Value Goods Tax (HVGT) – MOF

The government will not proceed with the implementation of the High Value Goods Tax, says the Ministry of Finance.

The Malaysian government has scrapped its plan to impose the High Value Goods Tax (HVGT), over a year after it was announced during the Budget 2025 tabling. As reported by NST, this was confirmed by the Ministry of Finance (MOF) in a written response during the Dewan Rakyat parliament sitting yesterday (July 29).

Previously known as the luxury goods tax, the HVGT was originally set to be implemented way back on May 1, 2024, before it was put on hold following pushback from industry players. The proposed tax rate was around 5% to 10%, which will affect high-valued goods such as cars priced above RM200,000, watches over RM20,000, and jewellery above RM10,000 in value.

Should it be implemented, the government estimated that the proposed rate for the HVGT would generate approximately RM700 million in tax revenue.

The written reply by MOF was a response to a query from Jempol MP Datuk Shamshulkahar Mohd Deli, who asked about the projected revenue from the government’s fiscal reforms. These reforms include the proposed HVGT, as well as other taxes like the Digital Goods Tax (DGT), Capital Gains Tax (CGT), Low-Value Goods Tax (LVGT), the expansion of the Sales and Service Tax (SST), as well as the rationalisation of existing and upcoming subsidies.

In said written parliamentary response, the MOF also further elaborated that while the government has scrapped the plan for HVGT, some of its elements have been incorporated into the revamped sales tax regime, where some luxury and discretionary items are now taxed at rates of 5% or 10%.

To make up for the loss of potential earnings from HVGT, MOF and the government have taken some steps to increase their revenue, including the broadening of the SST scope that just came into effect this month (July 2025), which by itself is expected to bring an additional RM5 billion this year.

Source: NST