Sales tax exemption on new vehicle purchase to revitalise demand


  • Business
  • Friday, 05 Jun 2020

KUALA LUMPUR (Bernama) -- The tax exemption on vehicle sales announced today is expected to revitalise demand and spur the industry in the coming quarter, after experiencing a sharp downturn.

Malaysian Automotive Association president Datuk Aishah Ahmad said the tax exemption announced could help reduce cost, as well as bring down the selling prices, combined with offers and discounts from car dealers.

"However, we are still cautious on the outlook and will stick to our revised targeted sales volume of 400,000 compared with the original forecast of 620,000 units,” she told Bernama when contacted.

Under the sales and services tax regime, vehicles are subjected to a 10 per cent sales tax.

Aishah noted that the sale of cars, which is considered as a big ticket item for purchasers, will follow the trend of employment in the country.

"Banks nowadays are quite stringent in approving car loans. We will monitor the trend from time to time,” she said.

In April, only 141 vehicle sales were recorded compared to 49,935 in the same period last year due to the COVID-19 pandemic, as well as the implementation of the Movement Control Order (MCO).

Meanwhile, UMW Toyota Motor Sdn Bhd (UMWT), in a statement today, welcomed the incentives provided to the Malaysian auto industry.

Its president, K. Ravindran said that the initiative was indeed a good news for the auto industry and the full savings would be passed on to customers.

"And we expect that the reduced prices will help revitalise the automotive industry,” he said.

UMWT will be making the relevant adjustments to the retail prices of all its models and apply them by June 15.

The measures were announced today by Prime Minister Tan Sri Muhyidin Yassin when announcing the National Economic Recovery Plan (PENJANA) to offset the impact of the COVID-19 pandemic.

The government allows exemption on sales tax for the purchase of new vehicles from June 15-Dec 31, 2020.

For locally-assembled (CKD) models, the exemption will be 100 per cent, while for imported (CBU) units, it will be 50 per cent.

-- BERNAMA
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MAA , car sales , Penjana , sales tax

   

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