Putrajaya should define high-value items better in new tax, says Dr Wee

KUALA LUMPUR: Putrajaya must further explain the definition of high-value items in its new luxury goods tax, said Datuk Seri Dr Wee Ka Siong (BN-Ayer Hitam).

Dr Wee said that when the luxury goods tax was proposed earlier this year, it specifically mentioned that handbags and watches would be taxed.

“Now, suddenly, the word handbag is no longer mentioned, and it seems to be replaced by jewellery.

I would like an explanation on the definition of high-value items,” said Dr Wee during his speech on Budget 2024 on Tuesday (Oct 17).

Dr Wee asked if watches, handbags and jewellery are subject to the new High-Value Goods tax announced in Budget 2024, which would be set at 5 to 10% on specific high-value items based on the threshold value of goods.

“Are there other items that would be defined as high-value items? How will the government determine high-value items based on the threshold value,” asked Dr Wee.

“Apparently, the threshold value is RM10,000 for watches, RM20,000 for jewellery and RM200,000 for cars. Is this value finalised,” he added.

Dr Wee also asked if electric vehicles would be subjected to the high-value goods tax if it were to be imposed on vehicles.

“Another important question, does this high-value goods tax only apply to new goods, or does it include second-hand goods,” said Dr Wee.

Dr Wee said that the government agreed not to impose the high-value goods tax on tourists, and there will be a high-value goods tax refund counter, which is similar to when the goods and services tax (GST) was implemented by the former Barisan Nasional government in 2015.

“Of course, customs officers must be stationed at tourist exit points. In that case, we might as well implement the GST because the same refund counter will be created next year,” said Dr Wee.

Meanwhile, Dr Wee said the Capital Gains Tax (CGT) on unlisted shares will lead to protests by many SME entrepreneurs.

He said this is because domestic and foreign public listed shares are not subject to the CGT.

“Local companies have been sacrificing and working hard to pay taxes to the country and are subjected to the CGT.

“On top of that, they must pay corporate tax yearly,” said Dr Wee.

He asked if the CGT is imposed on the purchase of unlisted company shares by individuals or if it is imposed on the acquisition of unlisted shares by a Sdn Bhd company to another Sdn Bhd company.

“We need clarity on this matter,” added Dr Wee.

Dr Wee said the CGT will be implemented on March 1 next year and that there is already the Real Property Gains Tax (RPGT).

“This can be seen as redundant. Tax experts such as Deloitte and Ernst & Young also believe there should be no double taxation,” said Dr Wee.

Policy stage debates on Budget 2024 will take two weeks, from Oct 16 to Oct 26, followed by a week of ministerial replies from Oct 30 to Nov 2.

Committee stage debates on Budget 2024 will commence on Nov 6 for over three weeks until Nov 27.

The ongoing Parliament session will take place till Nov 30.