KUALA LUMPUR, March 15 — The luxury goods tax which is being finetuned will not affect the country’s tourism sector, said Deputy Finance Minister Steven Sim Chee Keong.

He said tourists to Malaysia are not interested in shopping for luxury goods instead they come here to visit interesting tourist destinations, national heritage sites and buy local handicrafts.

"At the same time, they also get tax relief on the purchase of Malaysian handicrafts. If we look at it from that perspective, we are actually encouraging more people to come,” he told reporters in the lobby of the Parliament building today.

He was commenting on the call by former prime minister Datuk Seri Ismail Sabri Yaakob for the government to reconsider the implementation of the luxury goods tax as this would deter tourists who wish to shop in Malaysia.

According to Sim, the implementation of the tax was to extend the country’s tax revenue collection and create a more progressive taxation system without causing the industry to suffer.

"We are engaging with all stakeholders including the retail and tourism sectors to see how the impact can be reduced,” he said.

Sim said the tax only applies to goods classified as luxury goods and does not involve essential goods such as food and mobile phones.

In Budget 2023, Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim proposed to introduce the luxury goods tax from this year, with a certain value limited to the type of goods, including watches and fashion items, which he said would increase national revenue. — Bernama