Malaysia Imposes 10% Tax on Low-Priced Goods Imported Through Online Sales

Malaysia will impose a 10% sales tax on imported low-priced goods sold through online platforms starting this year.

Malaysian flag / Photo by Pixabay

According to local media such as The Star on the 3rd, the Malaysian government implemented the sales tax policy on low-value goods (LVG) as of the 1st of this month. It applies to all imported products sold online priced at 500 ringgit (approximately 140,000 KRW) or less, excluding cigarettes.

Major online shopping sites, including Shopee, Southeast Asia's largest online e-commerce company, as well as China-based AliExpress and Lazada, have started imposing the sales tax. Korean products exported to Malaysia through online platforms are also subject to the sales tax depending on their price.

The Malaysian government is said to have introduced the sales tax to protect domestic small and medium-sized enterprises and merchants. The Malaysian Customs Department originally planned to implement it in January last year but postponed it.

The sales tax is basically imposed on sellers, but as prices rise, it can result in increased burdens on consumers.