The low-value goods tax will apply to items purchased online and imported into the country by vendors who are registered with the finance ministry.

The tax was introduced in an amendment to the Sales Tax Act passed by the Dewan Rakyat in August last year and was to have been imposed from April 1 this year but was postponed.

The Dewan Rakyat was told last year that the government expects to collect RM200 million a year from the tax.

The deputy finance minister then, Shahar Abdullah, said the tax would level the playing field between online sellers both inside and outside Malaysia, and would empower local markets and businessmen.

The tax was first mooted by former finance minister Tengku Zafrul Aziz when tabling the 2022 budget.

In November, the Small and Medium Enterprises Association of Malaysia (Samenta) urged Putrajaya to implement the tax to mitigate the “uneven competition” between brick-and-mortar stores and online marketplaces.

Samenta president William Ng said local retailers have to pay taxes, rent and overheads, while online sellers often avoid their tax responsibility and tend to pay lower rent and overheads, if any.

We are live on Telegram, subscribe here for breaking news and the latest announcements.