The government has announced that the sales and service tax (SST) rate for pneumatic tyres and electric motorcycles has been reduced to 5% from the 10% that was previously set for both categories, Bernama reports.

According to finance minister Lim Guan Eng, the decision to reduce the SST rate for the two categories was made by the finance ministry together with the customs department following feedback gained through 18 briefing and Q&A sessions held nationwide, involving over 15,000 participants.

Previous news reports from last month indicated that a price hike for motor vehicle tyres (passenger car, light trucks, vans etc) was on the cards following the reintroduction of SST, with a number of tyre companies – including Michelin, Bridgestone, Goodyear, Continental and Hankook – announcing that there would be an expected increase as of September 1 when SST kicked in.

The move to reduce the SST rate to 5% should translate to another repricing exercise by tyre companies as well as those involved in the sale and distribution of electric motorbikes in the country, and in the case of tyres there should now be no noticeable increase in product pricing as a result of the rate revision.