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MoF has denied MAA’s appeal to extend SST cut, car prices to go up on 1-Jan 2021

Hans · Dec 24, 2020 03:31 PM

MoF has denied MAA’s appeal to extend SST cut, car prices to go up on 1-Jan 2021 01

The Ministry of Finance (MoF) has denied appeals by the Malaysia Automotive Association (MAA) to extend the current SST exemption/discount to 30-June 2021.

According to a report by Careta.my, the cut-off point for new cars to qualify for the 10 percent sales tax exemption is 31-December 2020, and the cars must be delivered to dealers/sales outlets latest by 31-December 2020, and registered before 31-Jan 2021.

MoF has denied MAA’s appeal to extend SST cut, car prices to go up on 1-Jan 2021 02

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Cars that are delivered to dealers/sales outlets after 31-December 2020 will be charged the 10 percent sales tax, regardless of their registration date.

Prior to this, the MAA have appealed to MoF to extend the sales exemption/discount period to 30-June 2021, in view that many car companies are still struggling to fulfill their backlogged orders collected.

The Covid-19 situation has also disrupted the supply chain, further complicating car companies' efforts to fulfill all orders received within this year.

MoF has denied MAA’s appeal to extend SST cut, car prices to go up on 1-Jan 2021 01

When the country first went into MCO mode, manufacturing plants have adjusted their production plans and parts ordering, but the Penjana stimulus package announced in June 2020, while appreciated, created a surge in demand that was too far off from the manufacturer's plan, and the nature of the manufacturing business, which typically require a 3 to 6 months lead time in parts ordering, logistics, and work shift planning, is not able to ramp up fast enough to meet the surge in demand.

Of course, the MoF has a different view on the matter. With more cars sold, the Treasury is losing even more tax revenue, so it has little reason to want to extend the SST exemption/discount period any further. 

Hans

Head of Content

Over 15 years of experience in automotive, from product planning, to market research, to print and digital media. Garages a 6-cylinder manual RWD but buses to work.

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