MCA Youth urges the Ministry of Finance to provide Malaysians with a clear and transparent explanation regarding the real reasons behind the cancellation of the High-Value Goods Tax (HVGT).

Previously, Prime Minister Dato’ Seri Anwar Ibrahim, outlined several new tax measures, including the Low-Value Goods Tax (LVGT) and claimed that the government now has "sufficient tax revenue," thereby justifying the decision not to proceed with the HVGT. Yet, at the same time, the government has cut essential subsidies for items like eggs and diesel, causing the cost of living for ordinary Malaysians to rise sharply.

By scrapping the HVGT, the government appears to be favouring high-income and wealthy individuals, while shifting the fiscal burden onto the general public. This is a clear example of a policy that 'prioritises the rich,' which starkly contradicts the principles of prosperity, fairness, and equality that the government often champions.

The Prime Minister has stated that the Capital Gains Tax (CGT) is expected to contribute around RM800 million annually, alongside adjustments to sales tax rates and an expansion of the Sales and Service Tax (SST), which are projected to increase national revenue by RM5 billion this year, hence the claim that tax collection is now sufficient.

But why is the government still imposing a 10% LVGT on ordinary citizens, including essential goods purchased online, while exempting luxury items such as designer handbags, high-end cars, and yachts, goods typically bought by the wealthy? This not only defies logic but also highlights an unfair bias in policy direction.

At a time when low- and middle-income earners are facing unprecedented financial strain, the government should be implementing targeted and effective taxation policies to strengthen wealth redistribution and reduce income inequality. The HVGT, in fact, is a progressive tax measure based on the principle of ability-to-pay and would not directly affect the majority of low- and middle-income citizens.

How can the government claim that national finances are strained, yet simultaneously assert that tax revenue is "sufficient" while cancelling the HVGT? If revenue is truly adequate, why cut vital subsidies? Why not allocate more resources to critical sectors like healthcare and education, areas that genuinely improve public welfare? Instead, programmes like SATU and Rakan KKM allow the wealthy to essentially 'skip the queue' for public universities and government hospitals simply because they can afford to pay.

If the government continues with policies that burden ordinary citizens while favouring the wealthy, it will only worsen income inequality and fuel public discontent. We strongly urge the government to refocus on people-centric policies and uphold fairness as a core principle.

Saw Yee Fung
MCA National Youth Secretary General

31 July 2025

-MCA Comm-