Jewellers heave sigh of relief as 'luxury tax' deferred

  • Nation
  • Friday, 29 Mar 2024

KLANG: Jewellers are heaving a sigh of relief as the High-Value Goods Tax (HVGT) has been deferred, even if only temporarily.

The government announced on Thursday (March 28) that the plan to implement the HVGT from May 1 has been indefinitely shelved as the Finance Ministry had not presented the Bill in Parliament yet.

The recent sitting has just concluded and the Parliament will only meet next in late June.

ALSO READ: ‘Luxury tax’ deferred for now

Indian jewellers, especially, are thankful that the proposed implementation will not take off on May 1.

SO Suppiah Jewelers proprietor Nadarajah Suppiah said he was relieved the HVGT has been indefinitely shelved.

"It's wedding season for Hindus beginning next month and this delay is good for us," said Nadarajah, whose outlet is in Jalan Tengku Kelana.

He said the Hindu wedding pendant, known as the thali, as well as its accompanying accessories are all made of gold.

ALSO READ : Industry players call for scrapping of HVGT in favour of GST

If the HVGT was imposed, many would find it difficult to buy the thali and its accessories, including the gold chain, as it would collectively cost more than RM10,000.

He said the HVGT was not suitable for the Indian jewelry business and hoped establishments like his would be exempted from it.

Manooh Pather Sdn Bhd owner M. Kumar also hoped the government will not impose the HGVT on jewellery outlets.

"Taxes like the HVGT are better suited for countries where gold is not part of their culture.

"It is not suitable here as gold is part of our culture and, for Hindus, an integral part of some religious ceremonies," he added.

ALSO READ: Finance Ministry finalising several HVGT policies, says Anwar

Kumar, whose business is also based in Klang, said there were also some people, especially Indians, who bought jewellery as an investment to be resold when the market price goes up.

He added that if the HVGT is imposed, they would have to wait a longer time to cover the cost of gold and the tax amount, before being able to sell for a profit.

"I think the government should shelve for good its plans to impose of HVGT on jewelry," said Kumar.

Tomei Consolidated Bhd managing director Datuk Ng Yih Pyang concurred that gold was a cultural entity as well as an investment amongst Malaysians.

He added many homemakers, who did not generally invest in stocks, shares and properties, invested by buying gold jewellery.

ALSO READ: Refining existing tax system is best approach, says Amir

"Gold can be sold for profit as well as pawned during emergencies," said Ng in emphasising that jewellery need not necessarily be perceived as a luxury item.

He added that the goods and services tax (GST) would be a better imposition rather than the HVGT.

"We have been telling the government all the while that the GST is a better system and the plan to impose the HVGT should be reconsidered," he said.

According to Budget 2024, the HVGT will be imposed on jewellery, high-end watches, designer clothes and accessories, cars, yachts, jets and properties that surpass a certain price.

The government apparently is looking at collecting tax revenue of RM700mil through the HVGT.

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