Malaysian online shoppers feel the pinch with new tax

PETALING JAYA: Malaysians who enjoy shopping online for overseas products may have to think twice now following a steep increase in some of their prices, with the introduction of the low-value goods (LVG) tax on Jan 1.

A check by The Star found that prices of LVG below RM500 offered by overseas sellers on some ecommerce platforms have generally gone up by RM2 to RM20, depending on the product.

However, some sellers have decided to even double the price.

Personal trainer Jamie Kng was shocked when a quick-dry top she bought online for RM19.94 inclusive of shipping fee and discounts is now RM39.60.

“It’s such a huge jump in price that I now wonder if I should buy a second piece of a different colour,” she said.

A senior lecturer, who only wanted to be known as Dr Ling, said he now has to pay almost 50% more for a windshield automatic umbrella for his wife’s new car.

“It used to cost less than RM50 inclusive of shipping cost plus vouchers.

“But now, the price is RM72,” he said, adding that he bought it anyway, as such items are not common yet among local sellers.

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As for Valerie Lanjuran, 25, an executive from Petaling Jaya, she said:

“Most of the items are slightly more expensive with an increase of about RM5 or less, depending on the items purchased.”

“But this is only reflected on the product’s listing page and not in the payment details,” she added.

Despite having to pay more, Lanjuran said it would not have a huge impact on her budget if such purchases are done only occasionally.

Furthermore, she said there are many options online, which makes it easy for the buyer to make comparisons.

She said the LVG tax would boost sales for local physical traders.

Yoga instructor Jenny Lee, 30, said she is feeling the pinch as she is a regular online shopper.

ALSO READ: Dr Wee calls for postponement of low value goods tax

She said she spends between RM200 and RM300 a month shopping online for items including clothing.

“I will end up paying about RM50 extra a month. But it is still bearable if the items are cheaper than if I buy them from a physical shop.”

But if the prices were similar, she said that she would prefer going to brick-and-mortar shops where she could touch and feel the product.

While online shopping is convenient, she said there was a risk that the quality of the products do not match what was advertised.

Federation of Malaysian Freight Forwarders president Datuk Tony Chia said all goods purchased from overseas must be declared with duty paid accordingly to the Customs Department.

“The onus is on the online sellers, whether local or outside the country, to register as a registered seller (RS) with the Customs Department.

ALSO READ: eCommerce sales tax gets mixed reaction

“In the case when the overseas seller is not registered, then those who handle the delivery for the seller should be registered.

“Every customs agent or broker needs to register (with the Customs Department) to impose the tax,” he said, adding that these customs agents can be shipping providers like Poslaju, Yunda and J&T.

Chia explained that freight forwarders were just service providers doing customs clearance and ensuring the import duty and sales tax are paid accordingly at the point of importation.

Starting Jan 1, Malaysia began charging a 10% sales tax on imported LVG costing RM500 and below sold online.