The former finance minister said the tax should be waived until after the “threat” of an expected recession was over.

“The threat of a global recession is real, as can be seen from the performance of the US economy and the Bank of England’s prediction that the UK will be in recession in the final quarter of this year,” he said in a statement.

“Malaysians do not need new taxes when pressing economic issues such as the high cost of living, soaring prices of food, severe labour shortage and rapidly depreciating ringgit remain unresolved.”

Last week, Dewan Rakyat passed the Sales Tax (Amendment) Bill 2022, which seeks to impose a flat 10% sales tax on goods purchased online and delivered to Malaysia by vendors registered with the finance ministry.

This flat rate will be imposed on LVG sold online priced below RM500 and will come into effect from next January.

Tabling the bill, deputy finance minister Shahar Abdullah said the government was expected to collect RM200 million a year from the implementation of this tax.

He said it would level the playing field between online sellers both inside and outside Malaysia, thus empowering local markets and businessmen.

Lim acknowledged that there was a need to create a level playing field but argued that the government should have instead waived the 10% sales tax for local suppliers. He said many purchases of LVG online were made by the lower income group.

“The additional RM200 million in revenue for LVG purchases online will be borne by the lower income group,” he said.

“The government should be reducing their tax burden instead of increasing them during times of imminent recession and soaring prices.”