PETALING JAYA: The 50% sales tax exemption for imported vehicles announced by the government will not have much impact on car sales, as the amount involved is too “modest”.
This is according to Malaysian Association of Malay Vehicle Importers and Traders (Pekema) president Datuk Zainuddin Abd Rahman, who said consumers might still be cautious in their spending, amid uncertainty over the Covid-19 pandemic.
Instead, Zainuddin suggested that the 50% exemption be implemented across the board for all vehicle-purchase-related taxes, including import and excise duties.
At present, imported cars are subject to an excise duty of between 60% and 105%, based on the model and engine capacity, while import duty can be as much as 30%, depending on the country of manufacture.
“If you take a Toyota Vellfire for example, the total tax comes up to about RM110,000. If the 50% exemption is across the board, that will be RM55,000,” he said yesterday.
“But the government only announced exemption for sales tax. For a lot of cars, consumers will be saving less than RM5,000. The discounts we ourselves are offering are even more than that.
“The sales tax exemption alone is not enough to help clear our stock and woo more customers. If it includes other taxes, then I think it will convince more people to buy.”
On Friday, Prime Minister Tan Sri Muhyiddin Yassin announced a full sales tax exemption until December for locally assembled or completely-knocked-down vehicles, and a 50% exemption for fully-imported or completely-built-up vehicles.
According to Zainuddin, of the 35,000 approved permits – which cost RM10,000 each – offered to car dealers and importers annually, only about 10,000 have been taken up so far this year, with just 3,000 cars sold in the first five months.
In addition, he said a further 17,000 imported vehicles are currently unsold from previous years, proving the gravity of the situation.
“We have over 170 (Pekema) members, and all are struggling to even bring in new cars into the country, as there are no sales to help us generate revenue.”
However, Zainuddin’s view was not shared by Volvo Car Malaysia marketing and public relations director Akhtar Sulaiman, who said the tax exemption will help spur sales.
