KUALA LUMPUR: The Small and Medium Enterprises Association of Malaysia (Samenta) has urged the online marketplaces to immediately facilitate the implementation of low-value goods (LVG) tax for both local and foreign sellers who have met the threshold.
The association has also urged the online marketplaces to refrain from passing additional costs to local sellers.
In a statement today, national president Datuk William Ng said it is the social responsibility of these marketplaces to help support Malaysian sellers and local products, given the extensive regulatory facilitation, promotional support and financial aid provided to them by various government agencies for years.
Malaysia will start charging a 10 per cent sales tax on imported LVG sold online from Jan 1, 2024.
Ng said the local retailers and online sellers, especially small and medium enterprises (SMEs), have been facing unfair competition from foreign sellers for many years.
“While local retailers have to pay tax at various points of the supply chain, including when bringing in components or raw materials and finished goods into Malaysia, we are being undercut by foreign sellers and local drop shippers who have largely escaped from paying tax to Malaysia on their products,” he said.
Additionally, he said directly delivered foreign products might not have undergone the same stringent quality and safety tests for electrical goods, foodstuff and pharmaceutical products that Malaysian manufacturers and importers were subject to.
“This could pose fire, safety and health risks to Malaysian consumers,” he said.
Hence, he said the LVG tax is good news for local retailers and would help narrow the inequality as well as allow local sellers, including SMEs, to compete on the basis of superior service, proximity, and better local consumer protection.
“The mandatory registration, as well as the 10 per cent tax on LVG will also drive additional revenue to Malaysia and support the ringgit while promoting domestic e-commerce,” he added. -Bernama
