Vehicle maintenance may cost more from next year, when service tax increases from 6% to 8% on March 1

Vehicle maintenance may cost more from next year, when service tax increases from 6% to 8% on March 1

During Budget 2024, it was announced that service tax will be increased from the 6% rate at present to 8% next year. This will start from March 1, as indicated by the customs department recently.

Exclusions to the new rate include that for food and beverage, telecommunication, provision of parking spaces and logistics services, but vehicle servicing and repairs do not fall under the exempted categories under the revision.

As such, the new 8% tax rate is set to be applied to vehicle servicing in terms of labour charges, but not the parts used in the course of servicing. This will likely result in higher overall vehicle servicing costs when the new rate begins, as The Star reports.

Vehicle maintenance may cost more from next year, when service tax increases from 6% to 8% on March 1

However, there has been no official confirmation about this, and the Federation of Motor and Credit Companies Association of Malaysia (FMCCAM) industry players has called on the government for clarity on the matter.

Its president Datuk Tony Khor said that while the new service tax rate would not directly affect car prices, it would certainly have an impact on maintenance costs. “I guess the new tax rate will be applicable to car workshops too, although the government has not confirmed it,” he said.

He added that any increase might be significant to second-hand car owners with a limited budget. “I understand that car maintenance expenses may increase but as owners, we also need to ensure vehicle safety and roadworthiness,” he said. Khor said the association would be requesting the government to consider waiving the extra 2% hike on service tax for small workshops and those who drive second-hand cars.

Vehicle maintenance may cost more from next year, when service tax increases from 6% to 8% on March 1

Tax expert Datuk Koong Lin Loong echoed Khor’s views, saying that while car prices are not likely to be affected, owners will need to fork out more money for maintenance if the new rate is applied.

“Car prices will only be affected by (and changes to) sales tax, import duty, excise duty and approved permits. However, car-related services such as repairs and maintenance will involve a labour charge and the additional 2% tax,” he said.

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Anthony Lim

Anthony Lim believes that nothing is better than a good smoke and a car with character, with good handling aspects being top of the prize heap. Having spent more than a decade and a half with an English tabloid daily never being able to grasp the meaning of brevity or being succinct, he wags his tail furiously at the idea of waffling - in greater detail - about cars and all their intrinsic peculiarities here.



  • Another good excuse to hike up on below par service

    Like or Dislike: Thumb up 10 Thumb down 0
  • GST vs SST on Dec 22, 2023 at 11:18 am

    Had the Madanon reinstated GST at 6%, we would not need to pay 10% SST. Well, we lost extra 20bil revenue yearly.

    Like or Dislike: Thumb up 12 Thumb down 4
    • Kea Was on Dec 22, 2023 at 1:36 pm

      Problem is that Malaysia is never ready for GST especially from the government themselves which is why most GST tax was not refunded back to businesses during its time resulting to price increase.

      Like or Dislike: Thumb up 5 Thumb down 10
  • Tanam kangkong on Dec 22, 2023 at 11:46 am

    Not sure how the madani gang come up with target subsidies to help the poor , in bigger picture , you retain fuel price for those who deserved , pay more on car services, spare parts will up, trust me, these will eventually hike up again, your food, etc, etc ..
    2% sst hike for logistic services , all sort of shit.

    Even small import now 10% applied across the board. Welcome to the world of hell from 2024 onwards, where the poor just get poorer !

    Like or Dislike: Thumb up 16 Thumb down 0
  • Demi kemajuan negara on Dec 22, 2023 at 1:15 pm

    Rakyat harus bersabar.

    Demi negara yg tercinta,
    Dicurahkan bakti penuh setia…

    Like or Dislike: Thumb up 1 Thumb down 8
  • Mekanik bawah pokok on Dec 22, 2023 at 3:52 pm

    I don’t charge service tax

    Like or Dislike: Thumb up 8 Thumb down 0
  • Sohai on Dec 22, 2023 at 9:45 pm

    Charge here charge there. Ini maksud madani ke?
    Second year of administration see all the unpopular measures coming out.
    Is getting worse than GST

    Like or Dislike: Thumb up 14 Thumb down 1
    • not a fan boy just passionate on Dec 24, 2023 at 1:28 am

      Anwar is smart. he is doing all the unpopular decisions now because there is no election coming up.

      Like or Dislike: Thumb up 4 Thumb down 0
  • Well first of all which government got us into such serious debt. Losing billions and billions.

    Cutting tax would be popular but if it causes government deficit, things will just get worse, look at Argentina, years of populist government. The debt is so high that to get better it has to get even worse first, cut down on government spending and higher taxes. Hope we are not heading there soon.

    Only positive way out is, to improve foreign and local investment. To do that we need political stability, skilled work force, etc. To achieve that, we need a good eduction system. To improve our education system, we need strong political will to do that. But looks like to do that will be political suicide.

    We need a government that will do what is best for our future, not popular decisions for political gain. Then again group with narrow minded agendas will make sure nothing good gets implemented. Even if anyone tries, they will be voted out.

    In the end, we all want better economy, more purchasing power, more well paid jobs but nobody wants to take the steps to achieve that. The majority of Malaysian are more concern about political power, the party they support to protect them against the other party, protect against delusional treats, subsidised cheap everything and have good live now.

    Like or Dislike: Thumb up 4 Thumb down 2
  • Seitha on Dec 26, 2023 at 11:54 am

    Malaysia is heading backwards to camel riding days while the other countries are progressing further

    Like or Dislike: Thumb up 0 Thumb down 0

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