Sales of new cars not likely to be affected by GST

  • Nation
  • Saturday, 10 Jan 2015

JOHOR BARU: Sales of new cars are unlikely to be affected when the Goods and Services Tax (GST) takes effect on April 1.

Johor Motor Hire Purchase and Finance Companies Association treasurer Simpson Tan said this was because there would not be much difference in the OTR (on the road) prices of the new cars with the GST.

“In fact, don’t be surprised if the OTR prices of new cars are cheaper post-GST period as there will be no more 10% sales tax imposed on the vehicles like now,” he said.

Tan said that with the implementation of the 6% GST, car makers would have to waive the current 10% sales tax on their vehicles.

“So you can say that prices of cars in the country will be cheaper after April,” he said.

However, Tan said that those planning to sell their existing cars to used car dealers or to trade in for new cars must be willing to accept low prices.

Under the GST regime, he said used car dealers would be taxed 6% profit made from the sale of used cars and not on the selling price of the vehicles.

“Used car dealers will need to spend money to repair the used cars, hence many are expected to offer lower prices to car owners,” said Tan.

Yong Ming Motor Sdn Bhd sales manager Patrick Yee said they anti­cipated sales of new cars to remain good even after GST kicks in.

He said the GST would not really stop Malaysians from buying new cars as many of them changed their cars every five to six years.

A car sales executive, who wanted to be known only as Cheryl, said more car dealers would hold promotions to attract buyers.

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