eCommerce sales tax gets mixed reaction
Malaysia University of Science and Technology economics professor Geoffrey Williams said that the sales tax’s impact on the eCommerce industry would not be too bad as a whole, as the market is “very competitive, cost-effective and convenient. KUALA LUMPUR: News of the upcoming imposition of the sales tax on imported low-value goods (LVG) purchased online is being met with mixed reaction, as economists begin to look into its potential impact on eCommerce players and consumers.
Last week, Dewan Rakyat passed the Sales Tax (Amendment) Bill 2022 to provide for the imposition of a 10% sales tax on online purchases of LVGs worth below RM500 which are sold on online platforms and delivered to Malaysia, starting next year.
Currently, LVGs worth RM500 and below are not subject to any tax when imported into Malaysia.
Malaysia University of Science and Technology economics professor Geoffrey Williams said that the sales tax’s impact on the eCommerce industry would not be too bad as a whole, as the market is “very competitive, cost-effective and convenient.
“Buyers can compare prices between competing companies more easily online, compared to having to walk from shop to shop to find good deals.
“So the impact on prices may not be so bad due to competition and easier price comparisons,” he told Bernama.Will the cost be passed on to consumers?
Putra Business School (PBS) economic analyst, associate professor Ahmed Razman Abdul Latiff said that the tax would impact sellers’ competitiveness. “If the majority of the foreign sellers decide to pass the tax on to the buyers, they will lose their price competitiveness against the conventional seller.
“It might also slow down the growth of the eCommerce industry since we are also experiencing an economic slowdown while dealing with the rising inflation rate and cost of living at the same time,” he said to Bernama.However, he added […]
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