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Finance Ministry: Low-value goods tax generates RM817m in additional revenue in 2025

Revenue boost comes as government targets broader compliance and strengthening of indirect tax collection

12:11 PM MYT

 

KUALA LUMPUR – The low-value goods (LVG) Sales tax on low value goods (LVG) contributed an additional revenue of RM817 million last year, up from RM476 million in 2024, according to the Ministry of Finance (MoF).

The increase reflects increasingly stable compliance by overseas sellers who sell goods directly to consumers in Malaysia through online platforms, the ministry said.

It said the 10 per cent sales tax on LVG, which came into effect on January 1, 2024, was introduced by the government to broaden the tax base fairly and address tax imbalances in cross-border digital trade.

“This approach is also aligned with international practices, with many countries implementing tax mechanisms on LVG sold online across borders.

“The implementation of the LVG tax helps reduce unfair price advantages, creating a more level playing field between local traders and foreign sellers,” the ministry said in a written reply published on Parliament’s website in response to a question from Tan Kar Hing (PH–Gopeng) regarding the amount of additional tax collected since the LVG tax implementation.

The MoF said the introduction of the tax has also had a positive impact on local small and medium enterprises (SMEs) in the domestic market by helping to reduce price gaps arising from differences in tax treatment between local SMEs and foreign sellers who supply goods directly to consumers in Malaysia via online platforms.

It added that this approach supports a more balanced market environment and encourages local SMEs to compete based on quality, value, and services offered, rather than solely on price.– January 29, 2026

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