PETALING JAYA: The Small and Medium Enterprises Association of Malaysia (Samenta) has come out in full support for the implementation of the low-value goods (LVG) tax that will effect from Jan 1, 2024.
National president Datuk William Ng said Samenta has been among the early proponents of the equalising tax and is grateful that the government is taking steps to implement it despite strong lobbying from online marketplaces.
“For many years, our local retailers and online sellers, especially SMEs, are fighting an unfair competition against foreign sellers.
“While local retailers have to pay tax at various points of the supply chain, including when bringing in components or raw materials as well as finished goods into Malaysia, we are being undercut by foreign sellers and local dropshippers who have largely escaped from paying tax to Malaysia on their products. This artificially distorts pricing in favour of these foreign sellers,” he added.
Additionally, Ng said directly delivered foreign products may not have undergone the same stringent quality and safety tests for electrical goods, foodstuff and pharmaceutical products that Malaysian manufacturers and importers are subject to and this could pose fire, safety and health risks to Malaysian consumers.
“The LVG tax is good news for our local retailers, and will help narrow the inequality and allow local sellers, including SMEs, to compete on the basis of superior service, proximity, and better local consumer protection. The mandatory registration as well as 10% tax on LVG will also drive additional revenue to Malaysia and support the ringgit, while promoting domestic e-commerce,” said Ng
He added that they will encourage Malaysians to buy from local retailers and sellers – not only in supporting the economy, but also better protect themselves and their families from fraud and fire, safety and health risks.
“We urge online marketplaces to immediately facilitate the implementation of the LVG tax for both local and foreign sellers who have met the threshold, and to refrain from passing additional costs to local sellers. It is the social responsibility of these marketplaces to help support Malaysian sellers and made-in-Malaysia products, given the extensive regulatory facilitation, promotional support and financial aid given to them by various government agencies for many years,” said Ng
