The Consumer Acceptance of Low-Value Goods (LVG) Sales Tax in Politeknik Mukah

Abstract

This study aims to investigate the determinants of public acceptance of low-value goods (LVG) sales tax with a focus on consumers in Politeknik Mukah.  The paradigm shift was significantly noted by the Royal Malaysian Customs Department (RMCD) declaration that LVG would be subject to Sales Tax starting from January 1, 2024. This cautious action shows that this circumspect move demonstrates the regulatory bodies' awareness of the fluid nature of international trade and their initiative-taking efforts to maintain the usefulness of the tax laws in place. The present study seeks to determine the influence of relevant factors on the acceptance of the LVG system in Malaysia. Based on a thorough examination of existing research, five variables have been determined: awareness, understanding, fairness perception, trust in authorities, and public acceptance. A standardised questionnaire was successfully collected from sixty-nine participants via official email and WhatsApp application. The data gathered were analyzed using IBM SPSS Statistics 22 and SmartPLS 4. The PLS-SEM is used as it works efficiently with complex models and can achieve high statistical power levels with small sample sizes. According to the results, both awareness and understanding do not have a relationship with public acceptance of the low value of goods (LVG) sales tax in Politeknik Mukah. However, fairness perception and trust in authorities have a significant positive relationship with public acceptance of the low value of goods (LVG) sales tax in Politeknik Mukah. The results on the dynamics of LVG sales tax acceptability and its repercussions could be highly informative for policymakers, stakeholders, and educational institutions like Politeknik Mukah.