Malaysia Imposes 10% Gold Import Tax Impacting Physical Gold Transactions

It has been reported that Malaysia recently imposed a 10% import duty on some gold bar imports. Bloomberg, citing informed traders, states that since the beginning of May this year, some inbound physical gold has been taxed, disrupting the country's physical gold trade. As local gold prices have not risen in tandem, the additional tax costs have eliminated the profit margin for gold imports, causing some shipments to be stranded at customs or rerouted to other regions.

The impact of the new tax regime is being transmitted to the consumer end. Malaysia's domestic Islamic bank, Bank Muamalat Malaysia Bhd., which offers gold investment products, stated in a release this week that once a 10% import duty on physical gold is imposed, this cost will be passed on to customers. A spokesperson for the Royal Malaysian Customs Department responded by saying that the Ministry of Finance will communicate with the industry regarding the import of "coinage gold products". The Malaysia Gold Association and the local representative of the World Gold Council declined to comment.

This tax comes at a time when the demand for physical gold in the country is surging. Earlier this year, the international gold price hit a historical high, stimulating investment enthusiasm across the Asian market. Over the past year, local banks in Malaysia have launched gold investment products, and physical gold logistics company Loomis AB has also opened a vault near the capital. According to data from the Malaysian Statistics Department, as of April this year, the country's total import of non-monetary gold has reached about 9.7 billion Malaysian Ringgit (approximately $2.5 billion).