Import duties

Abolishing Approved Permits (AP) for the import of cars will affect the government’s revenue through tax collection from AP holders, and have a negative impact on Bumiputera entrepreneurs in the automotive industry, the Malay Vehicle Importers and Traders Association of Malaysia (PEKEMA) has said, according to a Bernama report.

Although the number of cars sold made up only five percent of the overall market, annual tax collected from members of the association total over RM2 billion, PEKEMA president Datuk Zainuddin Abdul Rahman said.

“From the number of imports, the quantity that is brought in is not big. However, in terms of tax collection, our contribution is commendable,” he said in a statement in conjunction with PEKEMA’s annual general meeting.

“For example, in 2011 the government’s import tax collected from our members totalled RM2.8 billion, and this increased to RM3.3 billion in 2012.

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“This does not include annual corporate and individual taxes. Moreover, the government receives new revenue from the fees of each AP for used cars of RM10,000 which now amounts to more than RM1 billion.”

The irony, said Zainuddin, is that out of the more than 800 types of APs issued, APs for cars are the only ones on which the government has imposed a fee.

It was reported earlier in the week that the review on the impact of the termination of the Open AP system should be finished this year, according to the Malaysia Automotive Institute (MAI). The institute is in favour of abolishing Open APs because, it says, they limit the development of the automotive industry.

But, according to the PEKEMA president, this is unfounded, as “… the Open AP policy has succeeded in ensuring the participation of Bumiputera entrepreneurs in the automotive industry. This is one of the government’s affirmative actions in the implementation of the New Economic Policy,” he said, according to Bernama.

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On this, Zainuddin said PEKEMA was grateful to the government for considering the issues that could be faced by AP holders, especially its members.

“PEKEMA has consistently said that the huge implication on Bumiputera entrepreneurs if the Open AP policy is abolished is that it would kill the Bumiputera participation in the nation’s automotive industry…if the proposal is adopted,” he said.

According to the national news agency, International Trade and Industry minister Datuk Seri Mustapa Mohamed said earlier this month that the government is still studying the proposal to put an end to APs for the import of cars, and that whatever policy will be introduced to replace the AP system will compensate for the loss in government revenue.

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