Online marketplace operators must not pass additional costs to local sellers, says Datuk William Ng

The Small and Medium Enterprises Association of Malaysia (SAMENTA) is supporting the implementation of the Low Value Goods (LVG) tax, effective January 1, 2024, as this is a significant move towards fair competition and enhanced consumer safety,.

Datuk William Ng, SAMENTA national president and a longstanding advocate for this equalising tax, commends the government’s commitment to enforcing these measures despite strong opposition from online marketplaces.

For years, local retailers and online sellers, particularly SMEs, have faced unjust competition from foreign sellers. The existing taxation system places a burden on local retailers at various points in the supply chain, while foreign sellers and local dropshippers often evade taxes on their products, distorting pricing dynamics in favor of international sellers.

Beyond economic concerns, Ng raises a critical point about the potential risks associated with directly delivered foreign products. Unlike Malaysian manufacturers and importers who undergo rigorous quality and safety tests, foreign goods may lack these crucial evaluations, posing threats to the safety and health of Malaysian consumers.

The implementation of the LVG tax is seen as a positive development for local retailers, leveling the playing field and enabling them to compete based on service quality, proximity, and enhanced consumer protection.

Ng underscores that the mandatory registration and 10 percent tax on LVG will not only boost Malaysia’s revenue but also bolster the national currency while fostering growth in the domestic e-commerce sector.

Therefore, Ng has encouraged Malaysians to prioritise local retailers and sellers when making purchases, highlighting the economic and safety benefits of supporting domestic businesses. This, in turn, promotes a more resilient and self-sufficient national economy.

He also calls on online marketplaces to promptly facilitate the implementation of the LVG tax for both local and foreign sellers who meet the threshold, urging these platforms to refrain from passing additional costs to local sellers, underscoring the social responsibility of online marketplaces in supporting Malaysian sellers and locally manufactured products.

Ng views the LVG tax as a transformative step towards fostering fair competition, ensuring consumer safety, and strengthening Malaysia’s economic landscape. SAMENTA remains optimistic about the positive impact these measures will have on the nation’s business environment and calls for collaborative efforts from all stakeholders to uphold the interests of Malaysian sellers and consumers alike.

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