M'sian Govt Drops Plan For Luxury Goods Tax, Will Focus On Updated SST Instead | WeirdKaya

The Malaysian government has officially confirmed that it will not proceed with the implementation of the High-Value Goods Tax (HVGT) as originally planned.

This was revealed in a written response by the Ministry of Finance (MoF) published on Parliament’s official website on July 29, 2025.

However, that doesn’t mean luxury items are entirely off the hook.

According to the MoF, the principles of HVGT — which involved taxing non-essential luxury goods — are now being incorporated into a revised structure of the Sales and Services Tax (SST) instead.

According to The Edge Malaysia, this means selected luxury and discretionary items will still be taxed, but under the existing SST framework, at a rate of either 5% or 10%, depending on the item.

HVGT was supposed to start in May 2024

Initially, HVGT was introduced as part of the revised Budget 2023, announced in February 2023, and was scheduled to take effect in May 2024.

But the government later said that more time was needed to consult with stakeholders to ensure that the implementation wouldn’t negatively impact the economy.

As a result, the plan was shelved and replaced with a more flexible approach under SST.

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