“How will tax revenue from LVG, DST be used to benefit the rakyat?”
AN MCA leader has urged the government to clarify how the revenue collected from the Low-Value Goods Tax (LVG) and the Digital Services Tax (DST) will be used to benefit the masses amid high prices of goods and the cost of living.
Datuk Lawrence Low’s statement came in response to a report tabled by the Finance Ministry (MOF) in the Dewan Rakyat on Tuesday (Feb 18) that since their introduction and implementation last year, Putrajaya has collected RM476.1 mil from the LVG and RM1.6 bil from the DST.
“These funds should be returned to the people through various methods,” he stressed.
“It needs to be highlighted that the government’s decision to withdraw diesel subsidies last year led to a climb transportation costs, causing school bus operators to bemoan and express their intention to raise fares.
“This was despite the government’s assurance that the rationalisation of subsidies would not burden the majority of the public.”
For context, the LVG tax usually applies to imported goods that are valued at RM500 or less, purchased online and delivered via air courier. According to the Finance Ministry, around 63 sellers from 15 countries have registered under the tax framework.
Meanwhile, the DST, which first came into effect in 2020, applies to digital services provided by foreign registered businesses to Malaysian consumers. Currently, 464 foreign entities from 29 countries are registered under the scheme.
Low further expressed concern about the increase in electricity tariffs which supposedly “does not affect 85% of domestic account holders”, saying these escalating operational costs will eventually be passed down on to ordinary consumers.
“Naturally, citizens feel frustrated when the government introduces policies that burden them, especially in view of the rising cost of living that is becoming increasingly difficult to shoulder,” he remarked.
“Therefore, for the purposes of transparency and prudent financial management, the government ought to provide a detailed explanation on how the revenue from these new taxes will be used to alleviate the financial burden of people, to ensure that the public continues to have confidence in the government.”
Low went on to suggest that the government consider reintroducing the Goods and Services Tax at a lower rate of 3–4% at the initial stage.
“Even the members of the public, the business community, industry players and even members of the ruling coalition have acknowledged that the GST system is fair, more transparent and efficient,” he added.
In the written Parliamentary reply, the ministry had clarified that the government has no immediate plans for the GST, citing the long implementation period required.
Instead, it will continue refining the existing Sales and Service Tax (SST), which has been in use for over 40 years. – FocusM Feb 20, 2025
