Malaysia's new ‘luxury' taxes hit the middle class where it hurts
Malaysia 's new tax regime lands with a thud, even these modest pleasures are slipping out of reach.
When Prime Minister
Anwar Ibrahim unveiled his unexpected tax on imported luxuries in June, he promised the pain would be felt only by the affluent. The intent was clear: shore up government coffers by targeting the better-off. Yet the reality, for many Malaysians like Yoong, is the slow erosion of middle-class comforts as the increased tax burden adds to the rising cost of living.
Enacted on Tuesday, the levies on imported luxuries have raised the price of everything from cheese and nuts to cod and king crab.
A quick survey of supermarkets around Kuala Lumpur in the aftermath showed that the price of air-flown Norwegian salmon had surged by as much as 20 per cent to 90 ringgit (HK$167) a kilogram, while top grade blueberries from the US now cost up to 240 ringgit per kilogram.
The new taxes also extend deep into services once seen as everyday essentials for Malaysia's urban middle class: insurance, financial planning and private education from preschool to university. The breadth of the reforms, announced with little warning, triggered a wave of public anger that forced Anwar into a rare retreat – rolling back
taxes on apples and oranges , and beauty services, mere weeks after they were introduced.
A Malaysian woman shops for fruit at a market in Kuala Lumpur. New taxes on apples and oranges were rolled back soon after their introduction. Photo: AFP
For Yoong, as for millions of middle-class Malaysians, these concessions are cold comfort. 'Life is definitely going to be a pinch. It comes down to making choices,' he told This Week in Asia. 'I'm proud of being Malaysian, but I'm not proud of the government.'
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