The sales tax exemption that Malaysian carbuyers are currently enjoying was first announced in June 2020 as part of Penjana, the first stimulus package by the government to counter the crippling effects of the first movement control order. It was supposed to end along with 2020, but at the very last minute (December 29), the SST incentive was extended by a further six months, to June 30, 2021.
The SST exemption – which is 100% for new CKD locally assembled cars and 50% for CBU imported cars – was given another six-month extension when the Pemerkasa+ stimulus package was announced at the end of May. Now, the deadline for SST exemption is December 31, 2021.
But while the SST exemption is meant to support the auto industry by boosting demand for new cars, the following FMCO and subsequent EMCO for certain areas forced car factories and showrooms to close, negating the assistance. It’s close to two months now that the automotive industry has been effectively shut down in Malaysia, and carmakers can’t even fulfil existing orders.
To make up for lost time, so to speak, the Malaysian Automotive Association (MAA) is asking for another extension to the sales tax exemption. “Definitely, our members really want the SST exemption to be extended if this situation continues – even though we have orders, we cannot deliver, so what happens next?” MAA president Datuk Aishah Ahmad said in today’s 1H 2021 market review briefing with the media.
“We really plead with the government to extend the sales tax exemption should the MCO situation still be the same as it is currently, and if it’s not lifted,” she added. On how long an extension the car companies would like to see, Aishah said that more of the same would be good. “The last time they extended for another six months, we hope that they can do it for another six months,” she answered. So, it would be till June 2022 if MAA has its way.
Some might be surprised that there are Malaysians buying cars in today’s climate, but there are. MAA has revised downwards its total industry volume forecast for 2021 to 500k from the original 570k. That’s just 70k less, and half a million new vehicles sounds rather healthy in this climate. The SST exemption has definitely played its part.
The most pressing issue for the carmakers now is to fulfil orders. Aishah says that the order bank is good, but they just can’t make the cars with factories forced to close. “Orders are coming in, people still want to buy. The issue is when we’ll be able to deliver with the plants closed and showrooms closed,” she said.
Looking to sell your car? Sell it with Carro.
Malaysian is very fast adopting to latest tech, given affordable price.
Has the players follow NAP 2020 to attract more consumers?
New elements in NAP 2020
Next Generation Vehicles (NxGV).
Mobility as a Service (MaaS).
Industrial Revolution 4.0 (IR4.0).
Framework
Three directional thrusts: technology and engineering, investment, as well as market expansion.
Three strategies: value chain development, human capital development, as well as safety, environment and consumerism.
Player who actively supporting NAP2020 mission,
Can be granted with SSTfree for longer period.
Covid19 era survival is about immediate change, adapt, then grow!
Lifting SST can be gradual, instead of sudden.
SST Free for 1,5 years, already feels like it’s a norm that the new car to be priced so cheap and good.
Those not good one of cuz cannot sell.
Even if new cars prices slashed to half, people still not buying them.
Why? High number of unemployment, huge salary cut, retrenchment, bankruptcy, business folding, acceptance of WFH culture, rising cost of so many things.
Need I say more?
Should get rid of the sst for good
MAA should lobby for a sizable reduction of other car taxes that have “whacked” buyers for donkey years.
Make no mistake,with high oil prices,Petronas would have no problem doing some form of “national service” to shore up gomen finances,if car taxes are reduced.
The car industry will never be the same again.
There will be no return to the good old days.
Remember,if you dont adapt,covid will leave you far far behind.
The SST exemption should not be extended further – the nation’s treasury needs the taxes for the nation to recover from the pandemic as well as infrastructure development like public transportation systems & reduce basic food costs.
In this car-crazy country, why should not people who can afford cars pay sales tax in full? The government should still collect sales tax and develop public transport to reduce car usage.
Even the current standard exemption across the board is wrong, where cars above RM80k also gets the same sales tax exemption rate like cheaper cars. Now is the time to make the rich pay, so cars priced above RM80k & above should not get exemption at all. Not a fan of national cars, but if they produce & sell cheaper good cars, why give exemption to those who can afford & are willing to fork out much higher for branded & status cars? Mercedes, BMW, Porsche, Honda, Toyota, Mazda and more are the cars pursued by those who are status crazy so they should pay higher sales tax, duties and even COEs like in Singapore.
This pandemic is teaching us to take care of the nation & the people that owning material items like cars and keeping them home is useless. It is wisdom to invest & make good public transportation infrastructure, China is a good example. The environment has been positively impacted by the pandemic lockdown because of low factory activities & automobile usage.
It’s not true Malaysian car prices are high. Just look at the number of cars on the road, the heavy traffic disproves the claim Malaysian car prices are high – if car prices come down, there’ll be more havoc. Those who can afford & buy cars must pay the full price. The Govt should be strict with credit reviews & ensure BNM’s DSR is fully complied with so that the nation will not fall into the debt trap. To spur the economy, cheap credit should be taken away from car purchases & shift away to finance property purchases like in Singapore.
Thailand has clearly overtaken Malaysia & firmly established itself as the region’s automotive hub, no point continuing in a race we cannot win. But without giving up, the Govt should reduce the automotive industry incentives & move on to other fields.
The MAA is only thinking of itself, not the nation. The car sellers are already rich, they don’t have the rakyat in mind. The nation must move forward – the rakyat can live without more status & branded cars.
May not so true that Malaysian can really afford cars. Most of us likely are forced to buy, due to poor public transport in this country.
Car factories and showrooms must close and stopped all operations, for at least 1-2 years before reopen. Put all employees on No pay leave or just Retrench all. can rehire anytime when restarted factory ops.
Nyawa lebih penting dari wang! Lives more important then $$$!! Plss…
Only P2’s katak bawah tempurung and tikus can say that.