KUALA LUMPUR, March 7 — The government should reconsider its plan to introduce a Luxury Goods Tax as announced in Budget 2023, according to Bera Member of Parliament Datuk Seri Ismail Sabri Yaakob.

The former prime minister said the implementation of the tax can potentially discourage foreign tourists who prefer to shop from coming to the country.

Foreign tourists’ shopping activities contributed 30 per cent of the country’s RM86.1 billion tourism receipts in 2019, he noted.

"We want to make Malaysia a tourist haven that can compete with neighbouring countries which are currently the focus of tourists.

"I hope the government will exercise care in implementing this tax,” he said during the debate session on the Supply Bill 2023 (revised Budget 2023) here today.

To illustrate his point, Ismail Sabri said the retail sector in the United Kingdom (UK) was badly affected after the government "introduced” a luxury goods tax, with the number of foreign tourists shopping in European capital cities other than London rising by 80 per cent.

"This followed the UK government’s decision in 2020 not to allow tourists visiting the country to claim refunds on value-added tax (VAT) charged when shopping,” he said.

Under the re-tabled Budget 2023, the government has proposed to introduce a luxury goods tax starting this year which covers, among others, luxury watches and luxury fashion items. — Bernama