Gov to cut 100% sales tax for CKD cars and 50% for CBU cars, cheap enough?

Eric/Jun 05, 2020 04:35 PM

In light of the current Covid-19 pandemic, Prime Minister Tan Sri Muhyiddin Yassin has announced a number of measures to help boost Malaysia’s economy, including the automotive sector.

In an effort to boost new car sales, the Prime Minister has announced that there will be a 100 percent sales tax exemption when purchasing a new locally-assembled (CKD) car and 50 percent sales tax exemption with an imported car (CBU), beginning from 15th June to 31st December 2020.

At the moment, sales tax is set at 10 percent, applicable to both CKD and CBU cars.

But does that mean that new cars will be cheaper?

Considering that tax is applied to the cost price of the car, the amount you save increases proportionally with the car's price.

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