The imposition of the low-value goods (LVG) tax on 1 January has led to a significant surge in the prices of overseas products for Malaysians who prefer online shopping.
According to The Star, the prices of LVG below RM500, offered by foreign sellers on various e-commerce platforms, have generally increased by RM2 to RM20, depending on the specific product. Some sellers have even opted to double the prices.
Reportedly, personal trainer Jamie Kng expressed astonishment as the quick-dry top she initially purchased online for RM19.94, inclusive of shipping fees and discounts, now costs RM39.60.
A senior lecturer, identified as Dr. Ling, shared a similar experience, stating that he is now paying nearly 50% more for a windshield automatic umbrella for his wife’s new car, which used to cost less than RM50, inclusive of shipping costs and vouchers.
Valerie Lanjuran, a 25-year-old executive from Petaling Jaya, observed a slight increase of about RM5 or less on most items. Despite the additional expense, Lanjuran believes occasional purchases won’t significantly impact her budget, emphasising the ease of online comparisons and predicting a boost in sales for local physical traders due to the LVG tax.
Yoga instructor Jenny Lee, a regular online shopper, acknowledged feeling the pinch with an expected extra cost of RM50 per month for her shopping habits. However, she finds it acceptable as long as online prices remain lower than those in physical stores. Lee also highlighted the convenience of online shopping but noted the potential risk of product quality not meeting advertised standards.
Sellers are responsible for the LVG tax
According to Datuk Tony Chia, the president of the Federation of Malaysian Freight Forwarders, there is a mandatory requirement for all goods purchased from abroad to be declared with the corresponding duty paid to the Customs Department.
Chia stressed that the responsibility lies with online sellers, whether local or international, to register as registered sellers (RS) with the Customs Department.
In cases where the overseas seller is not registered, Chia stated that those responsible for handling the delivery on behalf of the seller should also be registered.
He further explained that every customs agent or broker must register with the Customs Department to enforce the imposition of the tax. These customs agents can include shipping providers such as Poslaju, Yunda, and J&T.
Chia clarified the role of freight forwarders, stating that they function as service providers responsible for customs clearance and ensuring that import duties and sales taxes are paid in accordance with regulations at the point of importation.
