Win-win: The extension of the vehicle registration period is a midpoint solution to balance the interest of consumers and national tax revenue, says Tengku Zafrul.
PETALING JAYA: The vehicle sales tax holiday will not be extended beyond June 30, but buyers who have booked their cars during the tax exemption period have until March 31 next year to register their vehicles with the Road Transport Department (JPJ).
Finance Minister Tengku Datuk Seri Zafrul Aziz Tengku Abdul Aziz said this is to ensure that buyers can still benefit from the tax exemption despite the decline in vehicle production amid the shortage of semiconductor chips and global supply chain disruptions, which are also delaying the delivery of new vehicles.
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He said 264,000 units of vehicles booked during the sales tax exemption period have not been fully assembled and cannot be supplied to buyers owing to the worldwide microchip shortage.
“The extension of this vehicle registration period is a midpoint solution to balance the interest of consumers and national tax revenue which needs to be re-enhanced post pandemic to ensure that the welfare of the people and economic well-being of the country continues to be preserved,” said Tengku Zafrul in a statement yesterday.
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He said the government had introduced the sales tax exemption for passenger vehicles, including MPVs and SUVs, since June 15, 2020 to assist the automotive sector.
A full tax waiver was granted for locally assembled cars and 50% for imported cars.
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To date, a total of 868,422 units of vehicles have been sold and citizens have benefited from sales tax exemption totalling RM4.7bil, he said.
“With the opening of the economic sector, the automotive sector has returned to operating.
“However, there are a number of demands that cannot be met in the wake of disruptions to the global supply chain,” he said.
Tengku Zafrul said the whole world is facing a shortage of semiconductor chips which are widely used across several industries including the automotive industry.
Proton deputy chief executive officer Roslan Abdullah said the ending of SST incentives by June 30 will encourage more bookings as customers who want to purchase the car will want to enjoy the advantage of lower pricing via the exemption.
Nonetheless, the government’s move of extending the registration period to March 2023 will enable Proton to manage the delivery to the customers, he said.
He added that the delivery period for Proton cars will vary depending on model, variant and colour.
At this point in time, Roslan said the average delivery period will be two to four months, while for the X50 – being the most popular model – it is six months.
He also said that not extending the SST incentive beyond June 30 is a positive development as incentives are meant for short-term effects.
“In the case of the SST exemption for the automotive industry, the intention was to stimulate sales in a market heavily affected by Covid-19 restrictions.
“That has worked, but the government had to forgo tax revenue. With the economy now fully reopened to pre-pandemic levels, the removal of the subsidy is fair and will aid the government in raising revenue for use in other areas requiring assistance,” said Roslan.
