Malaysia’s low value goods sales tax generated RM817 million in 2025, boosting revenue and levelling the playing field for local SMEs
KUALA LUMPUR: The sales tax on low value goods (LVG) contributed an additional RM817 million in revenue for the government in 2025.
This marks a significant increase from the RM476 million collected in 2024, according to the Ministry of Finance.
The ministry attributed the rise to increasingly stable compliance by overseas sellers using online platforms to sell directly to Malaysian consumers.
The 10% sales tax on LVG took effect on 1 January 2024 to broaden the tax base and address imbalances in cross-border digital trade.
“This approach is also aligned with international practices, with many countries implementing tax mechanisms on LVG sold online across borders,” the ministry stated.
It added that the tax helps reduce unfair price advantages, creating a more level playing field between local traders and foreign sellers.
The MoF provided this information in a written parliamentary reply to a question from Tan Kar Hing (PH–Gopeng).
The ministry said the tax has positively impacted local small and medium enterprises (SMEs) in the domestic market.
It helps reduce price gaps caused by differing tax treatment between local SMEs and foreign online sellers.
This approach supports a more balanced market environment, the ministry noted.
It encourages local SMEs to compete on quality, value, and service rather than solely on price.
