Sin Chew Daily, Oct 16, 2014
(Petaling Jaya, 15/10) Malaysians when returning from overseas trips or foreigners entering Malaysia are not supposed to bring goods worth more than RM400 excluding cigars and liquors. It is not new to pay tax for shopping exceeding the amount but many are not aware. Customs Department does not strictly enforce it too.
The government has gazetted a list of goods and services exempted from goods and services tax (GST) on 13 October. In the list of relief, one item raises public’s doubt – anyone entering Malaysia is not allowed to bring goods worth more than RM400 (includes souvenir and gift).
Nevertheless the list of items on tax exemption or tax reduction is nothing new. It has been stated in tourist’s guide in the website of Royal Malaysians Customs Department.
Low threshold for Customs Department to impose tax
As Malaysians often shop while travelling overseas, goods purchased are likely to exceed RM400. Hence the threshold set by Customs Department to impose tax is too low.
According to the guidelines on tax exemption goods listed by Customs Department, personal items listed below are not liable for tax:
a. 1 litre of liquor
b. 200 sticks of cigarettes
c. Three pairs of new clothes
d. One pair of new shoes
e. One set of mobile electronic or battery-operated equipment
f. Food not exceeding RM75
g. Apart from items stated above, goods value not more than RM400 (including souvenir and gifts). Goods purchased in duty free area such as Tioman, Labuan and Langkawi should not be more than RM500.
Singapore has similar ruling too but the value of goods exempted from tax is $600 (RM1,530), much higher than Malaysia.
In other words, for Malaysians who have bought expensive items such as branded goods in overseas and walk the green lane without declaration are liable to tax once stopped by custom officers. Currently, enforcement officers only check belongings of travellers randomly. The RM400 regulation is not strictly enforced.
Foreign tourists enjoy tax refund up to RM300 at designated shops
Are foreign tourists liable to pay GST while shopping and using various services in Malaysia? The answer is half correct. To make Malaysia a shopping heaven, the government has decided to follow other countries of implementing Tourist Refund Scheme (TRS) for eligible tourists to claim refund of the 6% GST.
TRS would be implemented simultaneously with GST on April 1. It allows foreign tourists to claim the refund of GST in designated shops. However, foreign tourists are to fulfil several criteria such as leaving Malaysia by air, spending RM300 in designated shops and agents are to impose processing charges for tax refund.
Higher threshold for tax refund compared to neighbouring countries
TRS in Malaysia is higher compared to Singapore and Thailand. Tax refund threshold for accumulated purchase of $100 (RM225) made in the same outlet in Singapore and 2,000 Baht (RM205) for Thailand.
For example, a foreign tourist spends more than RM300 in shopping in designated outlets recognised by the government. The tourist would have to show his passport and request for tax refund form on the spot to fill in details of arrival and departure date, shopping date and amount spent with signatures from both parties.
When the tourist is leaving Malaysia, he will have to bring the purchased items, passport and the tax refund form to be verified at the Customs Department counter. Once approved he can proceed to another counter for refund made in either cash (not more than RM300), cheque, bank into bank account or credit cards.
The government has also set restrictions like Malaysians and permanent residents are not entitled to tax refund. Foreign tourists who buy cigarettes, liquor, consumer products and products not brought along for departure are not entitled to tax refund.
At this juncture the government has not announced list of outlets participating in TRS. Details on processing fees imposed by agents for tax refund are still unclear.
Tourist refund scheme
Criteria for tourists eligible for tax refund:
1. Purchase of goods worth RM300 in one shop (receipts can be accumulated)
2. Purchase made in outlets listed as registered in GST system
3. Tourists depart by air
4. Tax agents are allowed to impose processing fee for tax refund claim
5. Tax refund claim made within three months of purchase
6. Liquor, cigarettes, consumer goods and goods not brought along for departure are not eligible for tax refund.
7. Malaysians and permanent residents are not eligible for tax refund.
How much do you know about GST
What is GST?
Tax revenue is the main source of income for the government. For many years, Malaysia rely heavily on oil tax. After implementing GST the tax base would be enlarged and GST is also commonly seen as a fair and effective tax collection scheme. GST replaces the current sales and services tax. More than 160 countries in the world impose GST. In ASEAN, only Malaysia, Myanmar and Brunei have yet to implement GST.
When is GST implemented?
April 1, 2015
What is GST rate?
6%
Who are to be registered?
Shops with annual sales volume of RM500,000 are to be registered. Sales volume of less than RM500,000 can register on voluntary basis to claim back input tax.
How many types of tax?
Goods and services are divided into five categories under GST – standard rated, zero-rated, exempted, out-of-scope and relief.
The government has fixed the standard rate at 6%. Citing an example, a consumer buys RM100 of electrical item. He has to pay RM106 for the item. Goods and services not listed under the exemption list are liable for GST starting April 1.
How to know more about GST?
Visit Customs Department website at http://www.gst.customs.gov.my, call GST line at 1300888500or 0388822111。
Source: Royal Malaysia Customs Department
Original Source: 出國購物逾400須繳稅‧關稅局沒嚴格執行多人不知情