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Luxury goods tax will not affect tourism. What about GST then?

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Luxury goods tax will not affect tourism. What about GST then?

Deputy Finance Minister Steven Sim Chee Keong said that the luxury goods tax which is being fine-tuned will not affect the country’s tourism sector. Article in here.

What’s your take on this?

You have worked hard. You needed a vacation. You checked out several countries. You checked out the sights, the entertainment scene, the shopping malls, the white sandy beaches and perhaps even the attractiveness of the hotel rates. Have you ever decided whether to go or not to go to a country based on the country’s consumption tax?Also known as Goods and Services Tax (GST)?

If you have, please do let me know which country was that and in the end which country did you go to which did not have such a high tax versus that country you decided not to go?

Here are more details from Steven Sim:

He said tourists to Malaysia were not interested in shopping for luxury goods, instead they came here to visit interesting destinations, national heritage sites and buy local handicrafts.

“At the same time, they also get tax relief on the purchase of Malaysian handicrafts. If we look at it from that perspective, we are actually encouraging more people to come,” he told reporters at the lobby of Parliament building today.

He was commenting on the call by former prime minister Datuk Seri Ismail Sabri Yaakob for the government to reconsider the implementation of the luxury goods tax as this would deter tourists who wish to shop in Malaysia. Please do read the full article in here.

Here’s my take on any tax (all are GSTs… if you know my meaning dear Malaysia)

Singapore has 7% Goods and Services Tax (GST). Australia has 10% Goods and Services Tax (GST). Japan has a Consumption Tax (aka GST) at 10%. UK has a GST of 20%. I have been to all these countries. Would I still want to go? Yes, of course. I have been to Singapore no less than 10 times, maybe more. I have been to Perth, Sydney and Melbourne and hopefully I could visit another city next.

I have been to many different cities in Japan and in terms of the country, I have been there three times. Meanwhile I am a UK graduate from Bristol and it is definitely a place I would like to visit again. Briefly, after all these explanations is that I DO NOT choose whether to go to a country for a holiday just because they have GST or Consumption Tax. I am there to spend my money and of course spend my time and get new experience. So, the overall experience I get is the only consideration and not the GST.

Stay focused on making the country an attractive holiday destination

Some important things to do? Make sure locals are employed in the tourism industry and NOT foreigners. This is a Malaysian destination yeah. Ensure cleanliness of all the places of interest. Close those places as soon as the cleanliness is not maintained. Continue the great campaigns of making Malaysia the most attractive destination in Asia. For example, Malaysia Truly Asia.

Promote the really Malaysian stuffs which are only available in Malaysia! For example, a cooking course of Malay, Chinese and Indian cuisines within the same class! My foreign friends love to ask me what’s the best food in Malaysia. I struggle to answer because I can eat Indian curry everyday, I have ordered mee rojak for 7 nights consecutively, I love ayam masak merah on my nasi lemak and a whole lot more.

These are all things which NO OTHER country has. No matter whether it’s Indonesia, China or India. I have not even included our amazing Nyonya food, the spicy and flavourful Portugese food and well, this is Malaysia yeah.

Now, if we are talking about tax this and tax that all the time, then that’s scary and not friendly at all

GST is consumption tax as the name already tells us. We spend, we pay. Simple fact. We spend more, we pay more. When we could afford to spend more, we could afford to pay more. However, if we do not have GST and yet we want to cover as much tax coverage as possible for everything outside sales and service (coz we have just SST), then it will always be new tax here and new tax there. Even when the economy expands, the government does not have higher revenue if the tax coverage is too narrow.

This is why the government would then have to think of how to get additional tax revenue since the economy is expanding. If you still do not get my meaning, well, all the best yeah. Without GST, it does not mean less tax to pay. Without sufficient tax revenue, that’s going to be a problem for the country. All these talk about reducing expenditure also tells us that there is a limit yeah. is an independent media and we are not affiliated with any political party or even NGOs. Cheers.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.


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