KUALA LUMPUR: The actual impact of a new excise duty regulation on car prices has yet to be determined, says Deputy Finance Minister Lim Hui Ying.
She said the government is currently identifying the most suitable approach to minimise the impact of vehicle price increases in line with the enforcement of Regulation P.U.(A) 402/2019.
It has been reported that industry players expressed concern in ongoing discussions with the government regarding the revised open market value (OMV) excise duty.
Some reports have suggested that this could increase vehicle prices up to 30%.
“Concerning the impact of this regulation on price increases, it has yet to be determined, as the business models of local vehicle assembly companies differ from one another, resulting in non-uniform application of excise duties on locally manufactured vehicles,” Lim told the Dewan Rakyat on Thursday (Nov 6).
Regulation P.U.(A) 402/2019 sets out the methods of enforcement for the collection of excise duty on excisable goods manufactured in local factories.
“It was implemented in 2020, and its application to the industry is in accordance with the Generally Accepted Accounting Principles (GAAP),” she said.
The government will take appropriate mitigation measures to reduce the impact on the people,” she added.
She was responding to a question by Datuk Shamsulkahar Mohd Deli (BN-Jempol) on whether the government will proceed with the deferment of the the Excise Duty (P.U.(A) 402/2019) Regulation, which is expected to increase vehicle prices by up to 30% starting in 2026, and also on the mitigation measures that will be taken to ensure that car prices remain affordable for Malaysians.
