M'sians buying gold ahead of luxury tax rollout
PETALING JAYA – With Chinese New Year around the corner, interest in gold is spiking as Malaysian shoppers try to “dodge” the upcoming luxury tax slated to be implemented in May.
Jewellers say despite the current high price of gold, many would be aiming to buy gold earlier as the item is tipped to be included in the new High Value Goods Tax (HVGT) list.
With Hari Raya Puasa set for April, industry players said they expected another surge in sales as Malaysians try to take advantage of the pre-HVGT period.
Federation of Goldsmiths and Jewellers Association of Malaysia advisor Ng Yih Pyng said gold jewellery sales have been picking up since November.
“We had the year-end Christmas and New Year festive season sales and now there is Chinese New Year and Valentine’s Day to look forward to. The footfall at malls has been good and jewellery sales have been improving,” he said.
Although gold prices are on the high side currently, Datuk Ng, who is Tomei Consolidated’s managing director, said consumers were still buying gold jewellery “to fit their needs.”
“People still buy gold for all kinds of occasions, such as for the coming festive season, weddings and birthdays,” he added.
Mr Ng said he expected the sale of gold jewellery to pick up in February when more tourists from China visit Malaysia during their school holiday and spring break, thanks to the visa-free exemption granted to them by the Malaysian government.
“Our jewellery is still much cheaper in the region. Besides, tourists won’t be taxed when shopping here. So when tourists come, they will certainly spend money at our malls and buy jewellery pieces,” he added.
Mr Mohamad Shaifudeen Mohamed Sirajudeen, chief executive officer of SMS Deen Jewellers said there has been demand for gold jewellery for the Chinese New Year.
“We are going to usher in the Year of the Dragon and there will be weddings and newborns being welcomed. So we expect more demand as we move into the year,” he said.
However, he said compared with the gold rush just before the Goods and Services Tax (GST) began in April 2015, there was “no panic buying” now.
Mr Mohamad Shaifudeen said the situation could change when the HVGT is confirmed.
“The price of gold is high now and its outlook is uncertain due to the ongoing geopolitical concerns. Consumers are looking for certainty in the market,” he said.
Habib group executive chairman Meer Habib concurred, saying that things would be clearer once the HVGT was finalised.
“Most people from the B40 and M40 groups still have gold as their investment preference and with this upcoming proposed tax, it will really affect them,” he said, adding that he was hopeful that exemption could be given on gold.
In October, The Star reported that jewellery worth RM10,000 (S$2,834) and several other luxury items will be taxed at a rate of between 5 per cent and 10 per cent under the HVGT.
Datuk Seri Meer said that the jewellery chain has also seen an increase in sales up to 15 per cent since last Christmas and school holidays.
He said that among the most popular products were gold and fine jewellery which included diamonds and other crafted jewellery.
“These items are mainly popular as consumers can keep them as both accessories and investment. They don’t mind paying extra for the craftsmanship,” he said.
Malaysian Indian Goldsmith and Jewellers Association president Abdul Rasul Abdul Razak said even with the gold price being high now, there were still many “passion buyers” out there.
He said many bought gold jewellery not only during the festivities but also for as long-term investment. – THE STAR/ASIA NEWS NETWORK
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