On 30 July 2025, the Malaysian government officially announced that it will not proceed with the implementation of the High Value Goods Tax (HVGT), a move that was initially expected to generate up to RM700 million annually.
What we could expect
The HVGT was originally scheduled to come into effect on 1 May 2024. It was designed to impose tax rates ranging between 5 percent and 10 percent on luxury goods such as vehicles priced above RM200000, watches over RM20000, and jewellery exceeding RM10000.
Finance Minister Datuk Seri Amir Hamzah Azizan confirmed in Parliament that the HVGT will no longer be implemented. Instead, its intended revenue model has been incorporated into the revised Sales and Service Tax (SST) structure.
Our thoughts
From a tech and consumer perspective, this decision could impact the pricing of premium technology products and electronics, which may now fall under the higher SST tiers.
Rather than introducing a separate tax structure, the government opted to enhance the existing SST framework, which now features rates of 5 percent, 8 percent, and 10 percent depending on the category of goods and services.
Other tax initiatives remain in effect. The Low Value Goods Tax (LVGT), which began on 1 January 2024, has already generated about RM500 million in revenue.
The Service Tax on Digital Services (SToDS), active since 1 January 2020, contributed RM1.6 billion. Meanwhile, the Capital Gains Tax (CGT) on unlisted shares, introduced on 1 March 2024, is projected to bring in around RM800 million per year.
The expansion of the SST scope, implemented on 1 July 2025, is expected to contribute RM5 billion to government revenue in 2025 and up to RM10 billion by 2026.
Additionally, the government's targeted diesel subsidy programme is helping to reduce monthly expenditure by approximately RM600 million.
Why this matters to tech enthusiasts
With the HVGT scrapped, high-end tech products such as flagship smartphones, luxury smartwatches, and imported premium electronics will now be taxed under the SST system.
While this may not eliminate price increases, it simplifies tax compliance and avoids the complications of a new standalone tax category.
What do you think about the government’s decision to cancel the High Value Goods Tax and shift its revenue goals to the expanded SST system?
Could this make it easier to manage tech pricing in Malaysia, or will consumers still feel the pinch? Stay tuned to TechNave.com for more updates.
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