The clock is ticking.

by AJ Black

writer and Mark Seng, the President of MWTA

Malaysian is in anticipation of 1st September 2018, when the newly elected government make good on its promise to abolish the GST, by reintroducing the SST. There were many debates to compare the good and bad of these two-tax scheme. On a larger scale what will be imposed will be a game changer to many industry players, or not.

In the case of the Malaysia Watch Trade Association (MWTA), the ‘missing’ of Timepiece (all types of wrist watches and clocks) from the drafted list of exempted items by the Ministry of Finance is alarming. Having been asking to verify between Customs and the Ministry, they were left in a limbo on the fate of the industry. The MWTA has more than a thousand members collectively, from watch traders, distributors and makers from all over Malaysia. And the effect of being left out from the exemption will implicate the entire chain on this industry. 

Based on the interview with Mark Seng, the President of MWTA, the watch industry has contributed about MYR1.8b to the nation’s income in 2017. Coming from timepieces alone, this is remarkable, but it didn’t happen overnight. The industry has invested in many concerted effort and promotions to bring the best of the best into the country, for launching, distributorship and for sale. And it is true that Malaysia has become a platform to launch many luxury brands in the region and sales has been pouring in.

The peak of tourism has not only made Malaysia a great destination for holidays, but also a shopping haven for luxury goods. And the simplest of it is an elegant and luxurious timepiece, where sales have been picking up with the arrival of nouveau riche from China, the seasonal travellers from the Arab countries, and basically everyone who would spend on the sight of good luxury bargain. In terms of competitiveness, our neighbour Singapore and Thailand are another favourite destination as well as Hong Kong. These countries are also known as shopping haven.

With the implementation of SST to timepiece, will we lose our competitiveness? It is something that only time can tell, if it ever come to not being exempted. So far, this draft of proposed exempted goods has made it rounds and the truth is, everyone who is not listed is in hot soup. 

Albeit worry about what to come to the fate of watch traders, Mark shared that his association has long waited for the opportunity to work hand in hand with the government to make it work for everyone in the industry. Investment that is already in place for the watch industry will be more prosperous with a collaboration let say; tourism. Especially, when lifestyle that exhibits luxury is something that is highly sought after in the new economy. The branded watches are sourced from Switzerland, Italy, Hong Kong and China. With the attractive exchange rate, it will be a steal to catch any of these timepieces while holidaying in Malaysia.

On a lighter note, Mark shared an observation on the trend of wearing watch among the younger generation. One in ten will prefer to tell time from an electronic device than one strap nicely on the wrist. In the older days, people wear watch not only to tell time, but to complete your outfit of the day. It’s considered as a discipline to keep check on the time. 

Yet, timepieces exude the allure of prestige and status symbol. And that is why it is here to stay.