Malaysia’s new luxury tax a hard sell for Anwar as popularity wanes

Many Malaysians may find life’s little indulgences suddenly beyond their reach from next month, when fresh taxes bite on premium goods and services like salmon and silk – and even haircuts – after the cash-strapped government said it would raise revenue from so-called luxury spending.

Taxes of between 5 and 10 per cent will be imposed on “discretionary and non-essential goods” as well as financial and beauty services and private education from July 1, the Finance Ministry said in a statement late on Monday.

This means Malaysians will have to pay 5 per cent more for premium goods – ranging from king crab to cod, truffle mushrooms and essential oils – and an extra 10 per cent on their hobbies if they are looking to buy racing bicycles or antique artwork.

These items all now come under the discretionary spending category. As these luxury items are not typically consumed by most Malaysians, they will not have much effect on inflation, according to the government.

Basic necessities like chicken, rice, milk, medicines and pet food, however, will remain exempt from sales tax, along with construction materials and agricultural inputs like fertiliser, “to avoid direct pressure on the cost of living” for most Malaysians, the government added.