By Karen Bong
KUCHING, Feb 24: Luxury goods like watches and fashion items, as well as liquid products or gel (e-liquids, otherwise known as ‘vape liquid’ or ‘vape juice’) containing nicotine for electronic cigarettes and vapes, will be taxed starting this year.
Prime Minister Datuk Seri Anwar Ibrahim announced this in tabling the National Budget 2023 as the government takes a more progressive approach to broaden the tax base to those with the means.
“The Federal government plans to introduce a Luxury Goods Tax including for luxury watches and fashion items, starting this year with a certain value limit according to the type of luxury goods.
“Furthermore, the government also plans to impose excise duty on liquid or gel products containing nicotine used for electronic cigarettes and vapes,” he said in tabling the budget in Parliament, which was broadcast live today.
Although vape containing nicotine is still illegal, Anwar emphasised the market is estimated to be worth over RM2 billion, and it would be beneficial if it were regulated and taxed to discourage vaping.
“The governments supported the Generational Endgame (GEG) effort and agreed that half of the excise duty revenue would be reallocated to the Ministry of Health to improve the quality of health services.
“To reduce leakages, efforts by enforcement agencies will continue to be intensified together with the industry stakeholders to curb the leakage of revenue and subsidies for smuggling syndicates such as diesel, alcohol and cigarettes,” he added.
To begin with, Anwar said the Inland Revenue Board (IRB) and the Royal Malaysian Customs Department (JKDM) will re-implement the voluntary declaration programme where those who come forward voluntarily to declare the goods starting June 1, 2023, to May 31, 2024, will be exempted from penalty entirely.
In line with international best practice, Anwar added that the government will study to introduce Capital Gains Taxto disposal of unlisted shares by companies from 2024 at a low rate.
The government will hold an engagement session with relevant parties to examine the details of this proposal. — DayakDaily
