Sea Limited (Malaysia) or ‘Sea’, the parent company of Shopee, has welcomed the Malaysian government’s move to impose the low-value goods (LVG) tax starting 1st January. Sea believes this will benefit local SMEs.
Sea strongly supports this strategic initiative and believes it will provide a significant boon to the SME sector while contributing positively to the broader Malaysian economy.
The LVG tax enables local businesses to market products of the same quality competitively at an even selling price, stimulating demand for local goods. Imported low-value goods were previously not subjected to any tax whilst a six per cent sales and service tax was imposed on locally produced items, resulting in local products being sidelined by consumers.
Terence Siau, Sea country head, believes that the LVG tax enables sellers, especially the MSMEs, to showcase that Malaysian-made and manufactured products can be on par with international standards.
“We have always been deeply committed to Malaysian MSMEs and we support the implementation of the LVGT by the Malaysian government. The potential boost to local MSMEs will lead to the creation of job opportunities and a better sustained domestic economy,” said Terence.
“It is also important to note that, despite the tax, buyers on Shopee will continue to have access to a wide variety of local goods on different price scales, easily discoverable on the platform. It also further encourages buyers’ support for local products.”
“We see it as our responsibility to help Malaysian sellers and made-in-Malaysia products thrive. Through Shopee, we are enabling MSMEs, especially the local brick-and-mortar operations in small-town and rural communities, to succeed in a digital-first world, connecting them to more customers beyond big cities,” he said.
It is also important to note that the implementation of the LVG tax is not exclusive to Malaysia, as other nations have already adopted similar measures within their Goods and Services Tax (“GST”) frameworks, including Australia, New Zealand, and Singapore. In Singapore, a 9% GST is currently applied to items valued at S$400 and below, imported via air or post.
Meanwhile, in Australia, 10% GST is currently applied to retail sales of imported low-value goods (AU$1,000 or less) when purchased by consumers.
“If you’ve recently made a purchase on Shopee, you might have seen our new notice about this tax. At Shopee, we prioritise transparency for our users, and we are the first e-commerce platform to inform our users about the LVG tax.
“We will play our role in facilitating the government’s implementation of this tax to foreign sellers who meet the stipulated threshold.
“However, we hope that when any tax regime is announced in the future, ample time is provided for all parties involved, including consumers, to understand and prepare for the changes comprehensively.
“Nevertheless, we are confident that the LVG tax will not only benefit MSMEs but also the domestic e-commerce industry. With a more level playing field now, local MSMEs are poised to thrive, and we remain committed to playing an important role in aiding their digitalisation efforts,” Terence added.
