All of us have at least some reason to be glad with the new Budget 2007. The absurd idea of scrapping motor vehicles above 10/15 years of age was not implemented in the budget, not at least for this year. So we’re safe for another year. Let’s have a look at what the Budget 2007 brings, in relation to motorists/the automotive industry:
- Underdeclaration of motor vehicles will be taken very seriously. If caught, a minimum compound of 5 times total tax payable to be imposed. Enforcement capacity of Customs will be increased.
- Biodiesel fund of RM500 million to develop the bio-diesel industry.
- RM19 billion to be allocated for fuel subsidy and tax foregone, which is higher than the previous RM16 billion figure. If next year’s oil prices remain around the US$70 per barrel range, subsidies and tax foregone should remain at current levels, which means there should be no reason for any huge petrol price increases.
We’re safe for now. The government’s decision to cut corporate tax rates from 28% to 27% for 2007 and 26% for 2008 pushed Proton share prices up by 5.3% to RM5.20.