In a statement today, the Malaysian Gold Association (MGA) said while an LGT is important to raise national income, the move could make gold no longer affordable for general consumers, subsequently affecting the sustainability of the gold industry.
“Malaysians in the bottom 40% (B40) and middle 40% (M40) income groups, regardless of ethnicity, are prone to buying 999.9 gold bullion and 916 pure gold jewellery as a form of investment and savings.
“These (precious) metals are usually passed down from one generation to another as part of the local culture,” it added.
MGA explained that luxury goods, on the other hand, are usually non-essential, of high margins and bring low returns or no resale value, which are mainly consumed by the high-income groups.
MGA urged the government to consider the survivability of approximately 4,500 gold jewellers and 1,000 gold manufacturers, and thousands of their employees should the luxury goods tax come into play for gold and jewellery.
“This is because when gold is no longer affordable for general consumers, it will subsequently affect the sustainability of the gold industry altogether,” the statement said.
MGA also suggested the government look into taxes such as the sales and services tax (SST) and income tax collected from various gold traders and jewellers over the past three years, and compare the effectiveness of the tax collection with and without the imposition of the LGT.
“MGA will continue to do our best to provide expert advice to help the government smoothly roll out the new policy, at the same time protect the survival of the gold industry,” said Louis Ng, president of MGA.
Established in 2014, MGA was formed to primarily address precious metal trading matters and participate in major policy setting with the authorities in Malaysia, and advance the precious metal trading industry to new heights.
Representatives of three gold associations – MGA, Federation of Goldsmiths and Jewellers Associations of Malaysia, and Malaysian Indian Goldsmiths Jewellers Association – conveyed their concerns on the LGT to the authorities during a meeting with officials from the finance ministry and customs department in Putrajaya earlier this week.