GST not an excuse not to lower car prices

KUALA LUMPUR: The implementation of the goods and services tax (GST) is not an excuse for automotive industry players not to lower car prices, Deputy Finance Minister Datuk Ahmad Maslan said.
He said car prices should drop as the current 10% sales tax imposed would be replaced by a 6% GST. "It's a simple calculation to understand, and automotive industry players should not find an excuse not to lower car prices by blaming it on the GST," he told Bernama here.
On an argument that car prices will not necessarily come down as the GST will be imposed at every level of the production and distribution chain, he said the tax imposed could be claimed unlike the sales and service tax (SST).
The GST at 6% will replace the existing sales tax (10%) and service tax (6%) from April 1, 2015.
Finance Ministry and International Trade and Industry Ministry officials have asserted that car prices on average might be slashed by between one and three after the GST is implemented.
Ahmad said the government had formulated policies to drive prices of certain goods down, so the prices of these items should be lowered.
"Indeed, we expect car prices to fall, but we are not certain of the rate," he said.
He said the prices of 532 out of 944 items exempted from the GST would drop based on the calculation of the multi-layered SST levied on them.
"The existing SST has resulted in the prices of goods to increase by between 15% and 18% from the 10% originally imposed," he said, adding that for processed food, the prices increased by 8% from the 5% tax levied.
Yesterday, the government announced a list of more than 900 items that will be zero-rated and exempted from the GST. – Bernama