Zafrul: Tax structure for automotive industry to remain

THERE are currently no plans to review the tax structure for the automotive industry, especially the excise duty, says International Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.

He was responding to a question from MCA president Datuk Seri Dr Wee Ka Siong, who asked if the government has any plans to review tax structures in the automotive sector in order to lower car prices.

“Does the government have any plans to review the existing tax structure, which has some impact on vehicle prices, and be able to reduce vehicle prices?” asked Dr Wee, the Ayer Hitam MP, in a supplementary question during Question Time.

Tengku Zafrul said the government has no plans to review the tax structure for the automotive sector, especially the excise duty, which is important to spur the development of the industry.

He explained that excise duties encourage value-added activities, especially locally assembled (CKD) vehicles 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,” said Tengku Zafrul, adding that the government had offered various incentives in the form of exemptions or reductions in excise duty and sales tax, in addition to the waiver of import duty for imported components used in the local assembly of vehicles.

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