On May 16, the ministry of finance (MoF) announced that Malaysia’s goods and services tax (GST), currently set at six percent, will be zero-rated (0%) from June 1 ahead of its eventual replacement by the previous sales and services tax (SST).

To reflect the upcoming changes, UMW Toyota has released the pricing for all Toyota models in its Malaysian line-up with GST zero-rated, effective June 1, 2018, the first automotive company to do so.

With GST effectively out of the equation, the entire Toyota model range automatically becomes cheaper. The price list below shows the new on-the-road price (OTR) without insurance excluding GST on the centre panel, comparing it to that with GST in place, with the price difference listed on the right most panel.

Those bothering to bring out the calculators will find that the difference in OTR pricing isn’t exactly six percent, but there’s no subterfuge involved or any hike in the existing selling price. Not just here, the difference will never directly be six percent based on an OTR price comparison with and without GST.

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This is because the 6% GST is only applied on the selling price of a car (and in the case of CBU models, a Puspakom inspection fee), before everything else like road tax, registration fee as well as an ownership endorsement fee is added on top of that, these with no GST applied. Companies that publish nett prices should see a 6% reduction in the nett selling price, because nothing else is factored in.

A check of the existing GST-based price lists reveals that there is no change to the selling price for all Toyota models – it’s as that listed before the 0% announcement was made, and so the final figures of the new, revised pricing removes GST as per equation and adds in the rest to obtain the final new OTR price (for individual private registration).

In terms of specifics, a quick look at how things now shape up. The entry-level Vios 1.5J manual transmission, priced at RM74,980 with GST, will now go for RM70,752, making it cheaper by RM4,228. The new C-HR, currently priced at RM145,500, will go for RM137,700, or RM8,200 less than with GST in place.

Elsewhere, the Alphard 3.5 Executive Lounge, currently listed at RM540,800, will be priced at RM510,343 as of June 1, making it RM30,457 cheaper. Sounds good, as will be the case for all new cars in the country come the start of next month, but bear in mind that these prices won’t last – the eventual reintroduction of SST will float vehicle pricing back up.