PETALING JAYA: It appears that Malaysians are not going for gold with the Malaysia Gold Association predicting almost a 30% drop in demand after the Goods and Services Tax begins.
“The scenario could last for up to a year, even during the wedding seasons, before the public starts buying jewellery again, especially gold ornaments,” MGA pro-tem secretary-general Datuk Louis Ng Chun Hau said.
“This is simply because the public thinks that they will be paying more for jewellery with the 6% tax,” he said when contacted.
Ng predicted that there could be 30% drop in demand for gold and silver jewellery.
“However, the situation would stabilise after about a year,” he said, expecially once people got used to the new tax system.
Under the GST, gold jewellery and other ornaments made from precious metals are categorised as standard-rated GST.
According to gst.customs.gov.my, jewellery made by an approved jeweller in the local market is standard-rated.
To qualify for GST exemption, Ng said the precious metal should meet criteria such as gold of at least 99.5% purity, silver of 99.9% purity or platinum of 99% purity, accredited by London Bullion Market Association.
Those involved in selling gold ornaments or jewellery might opt to include selling higher grade gold as well which are GST-exempted.
He said this would be one of the options for business operators if they did not want to see a drop in their sales.
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