Earlier today, prime minister Tan Sri Muhyiddin Yassin announced a new economic stimulus plan, called Penjana, which includes measures to help the automotive sector, specifically in promoting new car sales. These include a 100% sales tax exemption on locally-assembled (CKD) models and 50% on fully-imported (CBU) models from June 15 until December 31, 2020.
Sounds good, but will this result in a reduction of car prices? Well, yes, but not by as huge of a margin as you might expect. This is because the exemption applies only to the vehicle’s sales tax, which is 10% for both CKD and CBU passenger vehicles, and does not apply to import and excise duties. It’s also worth noting that the sales tax is charged higher up in the total pricing structure – before margins and inspection fees – to arrive at the retail price.
Effectively, we are reverting to the tax holiday enjoyed in 2018 from June 1 to August 31, which saw the removal of the goods and services tax (GST) from all car prices. It was not until September 1, 2018 that the sales and services tax (SST) was reimplemented, and we’ve been following this system until today.
With this latest announcement, the SST will now be removed (temporarily) for CKD cars and is halved to 5% for CBU cars, so car prices will go down. Given the ratio of the tax exemptions, CKD models are the ones that are truly part of this new “tax holiday,” while it is only a partial relief for CBU cars. Referring to the GST-free prices in 2018, cars were cheaper by a few hundred or thousand ringgit, depending on the model.
Digging through historical figures, a Perodua Myvi 1.5 Advance AT was priced at RM54,090 inclusive of SST in 2018, but was RM52,186.23 during the tax holiday (without GST or SST in effect) – an effective difference of RM1,903.77 or 3.52%. Similarly, a Honda City 1.5 V was RM86,893 with SST, but RM84,205 during the tax holiday – a difference of RM2,688 or 3.09%.
For more examples, we can look to the previous Toyota Vios 1.5 S AT, which was priced at RM93,200 with SST, but was RM88,677 during the tax holiday – a difference of RM4,523 or 4.85%. In the premium segment, the Mercedes-Benz E 250 Exclusive Line went for RM370,888 with SST, but was RM357,482.58 during the tax holiday – a difference of RM13,405.42 or 3.61%.
This effect was seen with a majority of models from other brands as well. As you can see in the numerous pricing tables we’ve prepared in 2018, the majority of differences were between 3-5%, and nowhere near the 10% (CKD) as many would be led to believe today. Still, a price reduction, no matter how small, is still a welcome change for car buyers.
Having said that, however, we did notice the differences in prices (SST vs tax holiday) were relatively larger for pick-up trucks. As these commercial vehicles are effectively sold without any excise or import duties, the removal of sales tax carries a bigger effect in their retail prices.
UPDATE (June 11): According to the Malaysian Automotive Association (MAA), pick-up trucks will not enjoy any sales tax exemption, because they are classified as commercial vehicles – as it turns out, the incentive is only for passenger vehicles, which includes SUVs and MPVs in the make-up. As such, all pick-up trucks sold in Malaysia will continue to be priced as they are currently, with SST in place.
The government is looking to encourage car sales with this initiative, which has a quantum of around RM897 million. This, in turn, will spur the nation’s economy as a whole. So, the tax holiday is technically back, and if you’re looking to buy a car, you’ll want to wait until June 15 to benefit from it.
We won’t know by exactly how much car prices will change, as there are a few variables and changes since 2018, but the aforementioned examples do give a rough indicator of what to expect, which is reductions of around 3% to 5% (definitely not 10%) across the board for CKD cars. We’ll bring you the updated price lists as they come in, so stay tuned.
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Looking forward to see X70 Premium price for this Covid19 2020 tax holiday.
Wow balik kampung Raya Haji ni! CHR baru wei
CHR boleh masuk satu org je
Majority buy X70 and X50, Some buy CH-R, CX-30 and CX-3 but HR-V only one customer sold. What a sad day.
Exactly bro. jam PKP diorang ckp satu org jek boleh masuk… Ketua rumah. Skrg nie tinguk2 mcm pesta kat luar tu .. free for all beb. boleh caya lg ke …. ciss sembang bro
Kampung pipu will laugh out loud if you drive CHR. it’so ugly
As long you still holds to a job… can invest buying a new car during this stimulus package. Provide you still got job. Down the road, next year or 2-3 years down the road, you may not have a job at all. Good luck!
This will spur the wealthy to purchase their Benz or Ferraris as the reduction will be huge for them comparing to the likes of say a Myvi or X70. With their money, companies will be able to stay afloat and jobs will be saved.
The wealthy purchase n drift-drift cari pasal.
Is there any Ferrari or Lambo CKD being on sale here?
Now this is truly a quality news portal dedicated to automotive! The way you break down the information and how the recent announcement impacted the industry and the consumer is just outstanding. In comparison to other news sites with niche similar to Paultan.org, nothing beats you guys! Thank you!
Don’t really think this would help many. People are prudent now more than ever. Only RM 200k above gain significant reduction in price.
People have no options, majority still needs to buy and use cars for essentials like going to work or going out so they will help to relief those who need to buy cars. In turn this will drive the economy forwards.
School cuti, people and kids stay at home bro.
Correct. Tax exemption or reduction transferred to loss of revenue to government which then passed to people as stimulus package, namely free handouts, and thus cause this year 2020 accumulated high deficit budget. This increase in national debts in which future generations will pay dearly. Just pass the debt to young generation…. well, what the heck, we old folks here enjoy first la and let our children suffer! Why not… why not… BEAUTIFUL! Old folks like us suffer a lot.
Excuse me. The current Nissan Navara (D23) is a CBU from Thailand.
True, was at the showroom last weekend & that’s what the dealers said
No wonder Tan Chong got saman from Kastams. They declared Navara was CKD but in truth it is CBU from Thailand. Serves them right.
Yup, the author state that navara was cbu.
Great news. Now if only I didn’t lose my job I’d be able to buy myself a new car and not keep driving my Naza Suria
Still, unemployment and people on furloughed scheme are the main hindrance of significant jump on sales..
Zero sales tax, more stringent loan approval by bank. Kong kali kong..
market so bad, might lose my job, oh well, lets buy a new car!
grow up, not for u to buy, others might be enticed, in turn economy will grow. if u cant contribute anything, pls stfu
He’s called Semi-Value for a reason. I guess soon to be called Bo-Value
haha….
now car price rm100k with sales tax
soon car price rm100k, markup price 10% without sales tax
it doesn’t work that way
Baca la table yg paultan buat psl penentuan harga kereta, mna blh mark up ikut rasa mcm jual super ring. Harga tu fix dari kerajaan sebelum launching kereta lagi.
its a catch-22 or a chicken and egg situation. You would be tempted with the reduced new car price. but if you will be needing to trade in your current car, the trade in price will definitely go down.
Dealer can giv better discount than this. Why bother
1 myvi gov get less than rm10k tax. 1bmw govt get rm150k tax. Myvi got discount rm10k also people dont buy cos poor people no money. Bmw give rm50k discount all rich people buy new car. Get it
How will the end retail price compared to those cars sold in rich countries like america , Dubai etc? Why poor countries sell their cars more expensive than rich countries? Or is it because when cars are cheap you’ll see more nice cars on the road and that attract positive business vibes into that country and make them successful? Malaysian gov short sighted. Keta mahal, negara nampak miskin semacam. Malu lah
How abt Singapore?
Don’t compare Singapore. Malaysia is one of the world’s biggest welfare nation. Malaysia is probably the most highly subsidized race on planet… after some middle east countries like Saudi, UAE or Qatar… and Venezuela. Unlike Singapore, tax bracket low, very low subsidy, high income and super strong currency. Plus its small country and huge population per square km, if every household owns 2-3 cars in Singapore, think what happened on its traffic flow!
our country miskin semacam ke?u go US lg byk miskin people bang..country nampak kaya@maju tp in reality org miskin byk..
U can ask Tun M for answer , as his desire to start 3rd National soon. Can c latest Camry & Accord already hitting RM$200k on protecting this 3rd car “pet project” That’s y excise tax still exists in Malaysia car market. Unless someone truly listens to Rakyat that willing to remove it permanently. BTW, looking on current situation. Rakyat ‘s rice bowl already on the edge. This sale tax relief is just a bait to feed certain communities. No benefit all commoners.
There are more bicycles than people in Denmark, both more numerous than cars. So are they more miskin than us. Malulah Denmark!
How much is the 10% savings about?
Maybe Paultan can assist all here to show which CKD modal available in Malaysia and how much saving buyer can get.
The figures given by Paultan.org are based on previous experience and the figures are not very accurate. Because not sure if the current car price already follows the new car price calculation/scheme introduced by PH. Only the car manufacturers can give the exact figures after they do some calculations most probably by next week and latest before 15 June 2020…
Our government, should first look into ways of making our Ringgit stronger against USD (3.3 instead of current 4.3) and hence everything will be much cheaper and the Rakyat will have more disposable income to spend.
If the government meaning us and the customer meaning us again is not totally benefiting than who is!!
Lets hope assholic car sales people/showrooms dont use this as a opportunity increase their profit margins.
Ada berita baik ke bagi pembeli yang terima kereta dalam bulan jun sebelum 15 hari bulan. Urusan beli masih dalam tempoh pkp.
#S.Singh may purchase before 31/12/200 to get year-end discount and this incentive.
Great info. Thanks paultan team.
The Art of Deception
Which sounds better?
a) 100% sales tax exemption OR
b) 10% sales tax waiver.
Dont be fooled.
What about the 100% excise duties which form bulk of the taxes and cause our car price to be one of the highest in the world?.
People barely holding onto their jobs…this carrot dangling will not help them….Not Smart.
Just got a letter from Mitsubishi, this is not applicable for pick up truck. Is it true!?
Don’t know Motorcycle have this tax holiday or not…