The government should consider extending the new vehicle sales tax exemption period until June next year, as this will continue to aid the local economy recovering from the effects brought about by the Covid-19 pandemic.

According to Proton Edar CEO Roslan Abdullah, an extension of the tax exemption period is the most appropriate measure to drive car sales and help towards a positive total industry volume (TIV) in the coming year. “We in the automotive industry really hope the government can consider extending the tax exemption by another six months, or at least until March next year,” he said when interviewed by Berita Harian recently.

He said the tax exemption has had a very encouraging impact on sales in the first three months, allowing the industry to recover losses incurred during the movement control order (MCO) period.

“In fact, the automotive industry has minimised retrenchment and some are still paying the same salaries as before the pandemic appeared. An extension of the tax exemption can further improve operations and ensure that manpower can be maintained,” he said, adding that such a move will also support the entire automotive and industrial supply chain, not just automakers.

The 100% sales tax exemption for locally-assembled passenger cars (CKD) and 50% for fully-imported models (CBU) announced under the Penjana economic stimulus plan runs until December 31. The industry has recorded strong sales numbers in the months since the SST exemption was announced, and the Malaysian Automotive Association (MAA) believes that the measures are good enough for a 70k increase in vehicle sales during the second-half of the year.

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