No Sales Tax Exemption For Goods Imported Via Foreign Portals -- Amir Hamzah

KUALA LUMPUR, Nov 25 (Bernama) -- Malaysia offers no blanket sales tax exemption on goods imported through foreign online portals, Finance Minister II Datuk Seri Amir Hamzah Azizan said.

The minister said the exemption only covers items listed under the Sales Tax (Goods Exempted From Sales Tax) Order 2025, regardless of whether the goods are imported or purchased from domestic producers.

“The measure closes an existing tax gap, as low-value imported goods were previously not subject to sales tax while locally produced goods were,” he told the Dewan Rakyat during Minister’s Question Time.

“LVG ensures all goods, whether domestic or imported, receive equal tax treatment, creating a more level playing field for local businesses.”

He was responding to a question from Tan Hong Pin (PH–Bakri) on the mechanism for collecting sales and service tax (SST) or other taxes on online transactions involving foreign sellers or portals.

Amir Hamzah said the level playing field also reassures domestic businesses that competition is based on quality, value and service rather than pricing alone.

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“Through this approach, the government ensures that local sellers are not unfairly burdened and receive support in managing production costs, while imported goods are subjected to an equivalent and fair tax mechanism,” he said.

Revenue collected from digital transactions under the Service Tax on Foreign Digital Services (SToDS) and LVG has continued to rise, reaching RM802 million in 2021, RM999 million in 2022, RM1.15 billion in 2023 and RM2.01 billion in 2024.

He said SToDS now applies to all foreign service providers that meet the criteria for supplying digital services to users in Malaysia, regardless of the provider’s country of origin.

Under the mechanism, foreign digital service providers such as Netflix, Apple, Microsoft and Google are required to register with the Royal Malaysian Customs Department and to collect and remit service tax when their services are used by customers in Malaysia.

“This ensures foreign providers shoulder the same tax responsibility as domestic providers and supports a fairer market environment within the digital ecosystem,” he added.

-- BERNAMA