In a joint statement, they said the tax would make Malaysia non-competitive and deter tourists from visiting the country.

They said the tax could also drive Malaysians to go overseas to buy luxury goods.

The retailers said this was a “lose-lose proposition” as the country would lose out on foreign tourist arrivals and force Malaysians to buy such luxury goods overseas, resulting in the loss of foreign exchange.

“Even if a mechanism can be designed for foreign tourists to claim back these luxury taxes, Malaysians would still be forced to do their shopping overseas.”

The statement was issued by the Malaysia Shopping Malls Association, BBKLCC Tourism Association Kuala Lumpur, Batu Road Retailers Association, Bumiputera Retailers Organisation, Federation of Malaysia Business Associations, Industries Unite, Malaysia Retailers Association, and the Malaysia Retail Chain Association.

They said if the government decided to go ahead with the new tax, then only big-ticket items should be considered.

“Big-ticket items like sports cars, racing motorbikes, yachts and aeroplanes can be considered,” they said.

The retailers said the government should also take a holistic view that balances risks, rewards and the flow-through multiplier effect of business activities that contribute to the economic growth of the nation.

In Budget 2023, announced by prime minister and finance minister Anwar Ibrahim, the government said luxury items like watches would be taxed.