Dr Wee questions govt plans for automotive tax structure review

KUALA LUMPUR: MCA president Datuk Seri Dr Wee Ka Siong has questioned the government whether it has any plans to review the existing tax structure in the automotive sector in order to push down the price of vehicles.

Dr Wee (BN-Ayer Hitam) said that the existing tax structure has some effects on the prices of vehicles.

"Does the government have any plans to review the existing tax structure, which has some impact on vehicle prices, and at the same time is able to reduce vehicle prices," he said in a supplementary question during Question Time in the Dewan Rakyat today (Feb 23).

In response, International Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the government so far have no plans to review the tax structure for the automotive sector, especially the excise duty which is important in the development of the industry.

He explained that excise duties play an important role in encouraging value-added activities, especially locally assembled (CKD) cars and the development of vendors.

"This (excise duty) is to encourage local vendors to participate in the development of the automotive industry in the country," added Tengku Zafrul.

Explaining the matter, Tengku Zafrul said the government had offered various tax incentives in the form of exemptions or reductions in excise duty and sales tax, in addition to import duty for imported components for local assembly of vehicles.

"The rate or level of incentives given depends on all the merit of the business plan such as the amount of investment, development of vendors especially local vendors, technology transfer and plans for export," said the minister.